Embed Size (px)
Citation preview
Draft Letter of Offer
March 11, 2013
For Equity Shareholders of the Company only
RELIANCE MEDIAWORKS LIMITED
Our Company was incorporated as Adlabs Films Private Limited on November 30, 1987, as a private limited company in Mumbai under the
Companies Act, 1956. Pursuant to conversion into a public company, our Company‟s name was changed to Adlabs Films Limited. Subsequently,
our Company‟s name was further changed to Reliance MediaWorks Limited. For details of changes in the name and the registered office of our Company, please see the chapter entitled “History and Certain Corporate Matters” at page 189.
Registered Office: Film City Complex, Goregaon (East), Mumbai 400 065, Maharashtra Contact Person: Ashish Agarwal, Company Secretary and Compliance Officer
Tel: +91 22 3980 8900 Facsimile: +91 22 3980 8985 Email: [email protected] Website: www.reliancemediaworks.com
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF RELIANCE MEDIAWORKS LIMITED
THE “COMPANY” OR THE “ISSUER” ONLY
THE PROMOTERS OF OUR COMPANY ARE RELIANCE LAND PRIVATE LIMITED AND RELIANCE CAPITAL LIMITED
ISSUE OF [●] EQUITY SHARES WITH A FACE VALUE OF `5 EACH (“EQUITY SHARES”) FOR CASH AT A PREMIUM OF `[●]
PER EQUITY SHARE FOR AN AMOUNT NOT EXCEEDING `60,000 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY
SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF [●] EQUITY SHARES FOR EVERY [●] FULLY PAID-UP EQUITY
SHARES HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [●] (“ISSUE”). THE
ISSUE PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE SEE THE
CHAPTER ENTITLED “TERMS OF THE ISSUE” AT PAGE 354 OF THE DLOF
GENERAL RISKS
Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in
the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks
involved. The securities being offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India
(“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Draft Letter of Offer. Investors are advised to refer to the chapter entitled
“Risk Factors” at page 11 before making an investment in this Issue.
ISSUER‟S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft
Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed
herein are honestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares are listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”) (collectively,
“Stock Exchanges”). Our Company received “in-principle” approvals from the BSE and the NSE for listing the Equity Shares to be Allotted in the Issue vide their letters dated [●] and[●], respectively. For the purpose of the Issue, the Designated Stock Exchange is [●].
Lead Manager REGISTRAR TO THE ISSUE
Axis Capital Limited
Axis House, 1st Floor,
C-2 Wadia International Centre,
P.B. Marg, Worli, Mumbai – 400 025 Telephone: +91 22 4325 3150
Facsimile: +91 22 4325 3000
Email: [email protected] Website: www.axiscapital.co.in / www.enam.com
Investor Grievance Email: [email protected]
Contact Person: Vivek Toshniwal SEBI Registration Number: INM000012029
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078 Telephone: +91 22 2596 7878
Toll-free: 1-800-22-0878
Facsimile: +91 22 2596 0329 E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in Contact Person: Pravin Kasare
SEBI Registration No.: INR 0000 04058
ISSUE PROGRAMME
ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR
SPLIT APPLICATION FORMS ISSUE CLOSES ON
[●] [●] [●]
TABLE OF CONTENTS
SECTION I: GENERAL ............................................................................................................................................... 1
DEFINITIONS AND ABBREVIATIONS .................................................................................................................... 1 NOTICE TO OVERSEAS SHAREHOLDERS ............................................................................................................. 6 PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ............................................ 8 FORWARD LOOKING STATEMENTS .................................................................................................................... 10
SECTION II: RISK FACTORS ................................................................................................................................... 11
SECTION III: INTRODUCTION ............................................................................................................................... 41
SUMMARY OF INDUSTRY ...................................................................................................................................... 41 SUMMARY OF BUSINESS ....................................................................................................................................... 43 SUMMARY FINANCIAL INFORMATION .............................................................................................................. 49 THE ISSUE ................................................................................................................................................................. 64 GENERAL INFORMATION ...................................................................................................................................... 65 CAPITAL STRUCTURE ............................................................................................................................................ 70 OBJECTS OF THE ISSUE .......................................................................................................................................... 84 BASIS FOR ISSUE PRICE ....................................................................................................................................... 140 STATEMENT OF TAX BENEFITS ......................................................................................................................... 143
SECTION IV: ABOUT THE COMPANY ................................................................................................................ 152
INDUSTRY OVERVIEW ......................................................................................................................................... 152 BUSINESS ................................................................................................................................................................ 165 REGULATIONS AND POLICIES ............................................................................................................................ 185 HISTORY AND CERTAIN CORPORATE MATTERS ........................................................................................... 189 OUR SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIP ........................................................................ 201 OUR MANAGEMENT ............................................................................................................................................. 212 OUR PROMOTER AND PROMOTER GROUP ...................................................................................................... 223 OUR GROUP COMPANIES ..................................................................................................................................... 233 DIVIDEND POLICY ................................................................................................................................................ 251
SECTION V: FINANCIAL STATEMENTS ............................................................................................................. F1
PRO FORMA FINANCIAL STATEMENT .......................................................................................................... F235
FINANCIAL INDEBTEDNESS ............................................................................................................................... 254 MANAGEMENT‟S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION ............................................................................................................................................................ 265 MATERIAL DEVELOPMENTS .............................................................................................................................. 301
SECTION VI: LEGAL AND OTHER INFORMATION ......................................................................................... 312
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ............................................................... 312
GOVERNMENT AND OTHER APPROVALS ........................................................................................................ 338 OTHER REGULATORY AND STATUTORY DISCLOSURES ............................................................................. 340
SECTION VII: ISSUE INFORMATION .................................................................................................................. 354
TERMS OF THE ISSUE ........................................................................................................................................... 354
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES .......................................................... 390
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION .......................................................... 391
SECTION IX: OTHER INFORMATION ................................................................................................................. 421
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................................... 421 DECLARATION ....................................................................................................................................................... 422
1
SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
Definitions
This Draft Letter of Offer uses certain definitions and abbreviations which, unless the context indicates or implies
otherwise, have the meanings as provided below. Reference to any legislation, act or regulation shall be to such
legislation, act or regulation as amended from time to time.
Issuer Related Terms
Term Description
“RMWL”, “our Company”, “the
Company” or “the Issuer” Reliance MediaWorks Limited
“We” or “us” or “our” or “our
Group”
Reliance MediaWorks Limited and its subsidiaries, joint ventures and
associates on a consolidated basis, unless the context indicates or implies
otherwise
ADAV Anil Dhirubhai Ambani Ventures Limited
Articles / Articles of Association Articles of Association of our Company
Auditors B S R & Co., Chartered Accountants and Chaturvedi & Shah, Chartered
Accountants
Board/Board of Directors Board of Directors of our Company or a duly constituted committee thereof
DDMG Digital Domain Media Group Inc. and its subsidiaries
Director A director of our Company
Eligible Equity Shareholders Existing Equity Shareholders on the Record Date i.e. [●]
Equity Shares Equity Shares of our Company at face value of ` 5 each
Equity Shareholder / Shareholder A holder of the Equity Shares of our Company
Group Companies
Companies, firms, ventures etc. promoted by our Promoters, irrespective of
whether such entities are covered under section 370(1)(B) of the Companies
Act or not and disclosed in the chapter entitled “Our Group Companies” at
page 233
iLab Our facility for digital image correction, film restoration and film processing in
the UK
Joint Ventures Joint ventures of our Company set out in the chapter entitled “Our Subsidiaries
Joint Ventures” at page 201
Lowry Digital Reliance Lowry Digital Imaging Services Inc.
Memorandum / Memorandum of
Association Memorandum of Association of our Company
Promoter Group
Such persons and entities constituting the promoter group of our Company in
terms of Regulation 2(1)(zb) of the ICDR Regulations. However, Reliance
Capital Limited, being an investing company, has made investments in excess
of 10% in its normal course of business in various companies, which are
neither related to Reliance Capital Limited nor Reliance Capital Limited has
any influence of management control over them. Accordingly, these companies
have not been included within the definition of „Promoter Group‟.
Promoters The promoters of our Company viz. Reliance Land Private Limited and
Reliance Capital Limited
Registered Office The registered office of our Company situated at Film City Complex,
Goregaon (East), Mumbai 400 065, Maharashtra
Reliance Group In context of this Draft Letter of Offer, Reliance Group shall mean the group of
companies headed / promoted by Anil Dhirubhai Ambani
2
Term Description
RoC Registrar of Companies, Maharashtra, situated at Everest, 5
th Floor,
100, Marine Drive, Mumbai - 400 002, Maharashtra
Subsidiaries Subsidiaries of our Company set out in the chapter entitled “Our Subsidiaries
and Joint Ventures” at page 201
Issue Related Terms
Term Description
Abridged Letter of Offer The abridged letter of offer to be sent to the Equity Shareholders of our Company
with respect to the Issue in accordance with the ICDR Regulations
Allot / Allotted / Allotment The allotment of Equity Shares pursuant to the Issue
Allottees Persons to whom Equity Shares of our Company are Allotted pursuant to the Issue
Application Supported by
Blocked Amount / ASBA
The application (whether physical or electronic) used by an ASBA Investor to
make an application authorizing the SCSB to block the application amount in his /
her specified bank account maintained with the SCSB
ASBA Account An account maintained with an SCSB and specified in the CAF for blocking the
amount mentioned in the CAF
ASBA Investor
Equity Shareholders proposing to subscribe to the Issue through ASBA process
and who:
1. are holding the Equity Shares of our Company in dematerialized form as
on the Record Date and have applied for their Rights Entitlements and /
or additional Equity Shares in dematerialized form;
2. have not renounced their Rights Entitlements in full or in part;
3. are not Renouncees; and
4. are applying through blocking of funds in a bank account maintained
with the SCSBs
Bankers to the Issue [●]
Composite Application Form /
CAF
The form used by an Investor to make an application for the Allotment of Equity
Shares in the Issue
Consolidated Certificate In case of holding of Equity Shares in physical form, the certificate that our
Company would issue for the Equity Shares Allotted to one folio
Controlling Branches of the
SCSBs
Such branches of the SCSBs which coordinate with the Lead Manager, the
Registrar to the Issue and the Stock Exchanges, a list of which is available at
http://www.sebi.gov.in
Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA
Investors and a list of which is available at http://www.sebi.gov.in
Designated Stock Exchange [●]
Draft Letter of Offer This draft letter of offer dated March 11, 2013 filed with SEBI
Investor(s) The Equity Shareholders of our Company on the Record Date, i.e. [●] and the
Renouncees
Issue
Issue of [●] Equity Shares each for cash at a premium of ` [●] per Equity Share
for an amount not exceeding `60,000 lakhs on a rights basis to the existing Equity
Shareholders of our Company in the ratio of [●] Equity Shares for every [●] fully
paid-up Equity Shares held on the Record Date (i.e. [●])
Issue Closing Date [●]
Issue Opening Date [●]
Issue Price ` [●]
Issue Proceeds The proceeds of the Issue that are available to our Company Issue Size The issue of [●] Equity Shares for an amount not exceeding `60,000 lakhs
Lead Manager/LM Axis Capital Limited
3
Term Description
Letter of Offer The final letter of offer to be filed with the Stock Exchanges after incorporating
the observations received from the SEBI on this Draft Letter of Offer
Listing Agreement The listing agreements entered into between our Company and the Stock
Exchanges
Monitoring Agency The Monitoring Agency appointed in accordance with Regulation 16 of the ICDR
Regulations
Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please see
the chapter entitled “Objects of the Issue” at page 84
Non Institutional Investors
All Investors including sub-accounts of FIIs registered with SEBI, which are
foreign corporate or foreign individuals, that are not QIBs or Retail Individual
Investors and who have applied for Rights Issue Equity Shares for a cumulative
amount of more than ` 2 lakhs.
QFI
QFI shall mean a person who fulfills the following criteria:
i. Resident in a country that is a member of Financial Action Task Force (“FATF”)
or a member of a group which is a member of FATF; and ii. Resident in a country
that is a signatory to International organization of Securities Commission‟s
Multilateral Memorandum of Understanding or a signatory of a bilateral
Memorandum of Understanding with SEBI.
Provided that the person is not resident in a country listed in the public statements
issued by FATF from time to time on: (a) jurisidictions having a strategic Anti-
Money Laundering / Combating the Financing of Terrorism (“AML / CFT”)
deficiencies to which counter measures apply; (b) jusrisdictions that have not
made sufficient progress in addressing the deficiencies or have not committed to
an action plan developed with the FATF to address the deficiencies;
Provided further, such person is not resident in India;
Provided further that such person is not registered with SEBI as FII or Sub-
Account, Foreign Venture Cpaital Investor.
QIB(s) or Qualified
Institutional Buyer
Applicants in the Issue who are qualified institutional buyers, as defined under
Regulation 2(1)(zd) of the ICDR Regulations
Record Date [●]
Registrar to the Issue Link Intime India Private Limited
Renouncee(s) Any person(s) who has/have acquired Rights Entitlements from Equity
Shareholders
Rights Entitlement The number of Equity Shares that an Investor is entitled to in proportion to the
number of Equity Shares held by the Investor on the Record Date
SAF(s) Split Application Form(s)
SCSB(s)
A Self Certified Syndicate Bank registered with SEBI, which acts as a banker to
the Issue, and which offers the facility of ASBA. A list of all SCSBs is available at
http://www.sebi.gov.in
Stock Exchanges The BSE and the NSE where the Equity Shares of our Company are presently
listed
Conventional and General Terms or Abbreviations
Term/Abbreviation Description/ Full Form
` or Rupees or INR or Rs. Indian Rupee
AGM Annual General Meeting
4
Term/Abbreviation Description/ Full Form
AS Accounting Standards in accordance with the Companies (Accounting Standards)
Rules, 2006 as amended
BPLR Benchmark Prime Lending Rate
BSE BSE Limited
CDSL Central Depository Services (India) Limited
Central Government The Central Government of India
CIN Corporate Identification Number
Companies Act Companies Act, 1956
CY Calender Year
Depositories Act Depositories Act, 1996
Depository A depository registered with the SEBI under the Securities and Exchange Board of
India (Depositories and Participants) Regulations, 1996
DIN Director Identification Number
DP ID Depository Participant Identity
DP / Depository Participant Depository Participant as defined under the Depositories Act
EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation
ECS Electronic Clearing Service
EGM Extra-Ordinary General Meeting
EPS Earnings Per Share
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999
FII Foreign Institutional Investor (as defined under the SEBI (Foreign Institutional
Investors) Regulations, 1995), registered with the SEBI
Financial Year / Fiscal / FY
12 months ended March 31 of that particular year. In relation to our Company, Fiscal
2008 represents the nine months ended March 31, 2008, Fiscal 2012 represents eighteen
months ended September 30, 2012, Fiscal 2013 represents six months ending March 31,
2013 and Fiscal 2014 represents 12 months ended March 31, 2014
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
GoI Government of India
ICAI Institute of Chartered Accountants of India
ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended from time to time
IFRS International Financial Reporting Standards
India Republic of India
Indian GAAP Generally accepted accounting principles followed in India
IT Act Income Tax Act, 1961
LLC Limited Liability Company
LIBOR London Inter Bank Offer Rate
MCA Ministry of Corporate Affairs, Government of India
Mutual Fund / MF Mutual fund registered with the SEBI under the SEBI (Mutual Funds)
Regulations, 1996
NECS National Electronic Clearing Service
NR Non-Resident
NRE Account Non-Resident External Account
NRI Non-Resident Indian
NRO Account Non-Resident Ordinary Account
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
p.a. Per annum
5
Term/Abbreviation Description/ Full Form
PAN Permanent Account Number
PAT Profit After Tax
PBT Profit Before Tax
PLR Prime Lending Rate
QIP or Qualified Institutions
Placement
Qualified Institutions Placement in accordance with the provisions of Chapter VIII of
the ICDR Regulations
RBI Reserve Bank of India
Regulation S Regulation S under the Securities Act
SBI PLR Prime lending rate of State Bank of India
SEBI Securities and Exchange Board of India
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time
Securities Act U.S. Securities Act, 1933, as amended from time to time
SEZ Special Economic Zone
Sq.ft. square feet
STT Securities Transaction Tax
Takeover Code The Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
Tier 1 Cities Fairly well-established market, with potential of higher consumer pattern
Tier 2 Cities Growing market, experiencing growing demand and investments
Tier 3 Cities Market yet to be established, where customers are relatively more price sensitive
UK United Kingdom
US / USA / United States United States of America
Technical and Industry Related Terms
Term/Abbreviation Description/ Full Form
2D 2 dimensional
3D 3 dimensional
6D 6 dimensional
ATPs Average ticket prices
C&S Cable and satellite
CGI Computer-generated imagery
DCI Digital Cinema Initiative
DI Digital intermediate
DTS Digital Theatre Surround
E&M Entertainment and media
IMAX Image Maximum
SPH Spend per head on food and beverages
TVC Television commercials
VFX Visual effects services
6
NOTICE TO OVERSEAS SHAREHOLDERS
No action has been or will be taken to permit the Issue in any jurisdiction where action would be required for that
purpose, except that this Draft Letter of Offer has been filed with the SEBI for its observations. Accordingly, the
Equity Shares may not be offered or sold, directly or indirectly, and this Draft Letter of Offer may not be
distributed, in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt
of this Draft Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make
such an offer and, in those circumstances, this Draft Letter of Offer must be treated as sent for information only and
should not be copied or redistributed. Accordingly, persons receiving a copy of this Draft Letter of Offer should not,
in connection with the issue of the Equity Shares or the Rights Entitlements, distribute or send this Draft Letter of
Offer in or into the United States or any other jurisdiction where to do so would or might contravene local securities
laws or regulations. If this Draft Letter of Offer is received by any person in any such territory, or by their agent or
nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in this Draft
Letter of Offer.
Neither the delivery of this Draft Letter of Offer nor any sale hereunder shall, under any circumstances, create any
implication that there has been no change in our Company's affairs from the date hereof or that the information
contained herein is correct as at any time subsequent to the date of this Draft Letter of Offer.
NO OFFER IN THE UNITED STATES
The rights and the Equity Shares have not been and will not be registered under the United States Securities Act,
1933, as amended (“Securities Act”), or any U.S. state securities laws and may not be offered, sold, resold or
otherwise transferred within the United States of America or the territories or possessions thereof (“United States”
or “U.S.”) or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act
(“Regulation S”)), except in a transaction exempt from the registration requirements of the Securities Act. The
rights referred to in this Draft Letter of Offer are being offered in India, but not in the United States. The offering to
which this Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any
securities or rights for sale in the United States or as a solicitation therein of an offer to buy any of the said securities
or rights. Accordingly, this Draft Letter of Offer / Letter of Offer / Abridged Letter of Offer and the enclosed CAF
should not be forwarded to or transmitted in or into the United States at any time.
Neither our Company nor any person acting on behalf of our Company will accept subscriptions or renunciation
from any person, or the agent of any person, who appears to be, or who our Company or any person acting on behalf
of our Company has reason to believe is, either a “U.S. person” (as defined in Regulation S) or otherwise in the
United States when the buy order is made. Envelopes containing CAF should not be postmarked in the United States
or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an offer
under the Letter of Offer, and all persons subscribing for the Equity Shares and wishing to hold such Equity Shares
in registered form must provide an address for registration of the Equity Shares in India. Our Company is making
this issue of Equity Shares on a rights basis to the Equity Shareholders of our Company and the Letter of Offer /
Abridged Letter of Offer and CAF will be dispatched to Equity Shareholders who have an Indian address. Any
person who acquires rights and the Equity Shares will be deemed to have declared, represented, warranted and
agreed, (i) that it is not and that, at the time of subscribing for the Equity Shares or the Rights Entitlements, it will
not be, in the United States when the buy order is made, (ii) it is not a “U.S. person” (as defined in Regulation S),
and does not have a registered address (and is not otherwise located) in the United States, and (iii) is authorised to
acquire the rights and the Equity Shares in compliance with all applicable laws and regulations.
Our Company reserves the right to treat as invalid any CAF which: (i) does not include the certification set out in the
CAF to the effect that the subscriber is not a “U.S. person” (as defined in Regulation S), and does not have a
registered address (and is not otherwise located) in the United States and is authorised to acquire the rights and the
Equity Shares in compliance with all applicable laws and regulations; (ii) appears to our Company or its agents to
have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided;
or (iv) where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable
7
legal or regulatory requirements; and our Company shall not be bound to allot or issue any Equity Shares or Rights
Entitlement in respect of any such CAF. Our Company is informed that there is no objection to a United States
shareholder selling its rights in India. Rights Entitlement may not be transferred or sold to any U.S. Person.
European Economic Area Restrictions
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive
(each, “Relevant Member State”), an offer of the Equity Shares to the public may not be made in that Relevant
Member State prior to the publication of a prospectus in relation to the Rights Entitlement or the Equity Shares
which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved
in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that an offer of Equity Shares or Rights Entitlement to the public
in that Relevant Member State from and including the Relevant Implementation Date may be made:
(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised
or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last Fiscal;
(2) a total balance sheet of more than Euro 430.00 lakhs and (3) an annual net turnover of more than Euro
500.00 lakhs, as shown in its last annual or consolidated accounts; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of Equity Shares shall result in the requirement for the publication by our Company or
the Lead Manager pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any Equity Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the
terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe
the Equity Shares, as the same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes
any relevant implementing measure in each Relevant Member State. In the case of any Rights Entitlement or Equity
Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such
financial intermediary will be deemed to have represented, acknowledged and agreed that the Rights Entitlement or
Equity Shares acquired by them in the Issue have not been acquired on a nondiscretionary basis on behalf of, nor
have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an
offer of any Rights Entitlement or Equity Shares acquired by them in the Issue to the public other than their offer or
resale in a Relevant Member State to qualified investors as so defined who are not financial intermediaries or in
circumstances in which the prior consent of the Lead Manager has been obtained to each such proposed offer or
resale.
United Kingdom Restrictions
This Draft Letter of Offer is only being distributed to, and is only directed at (i) persons who are outside the UK , or
(ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (“Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as
“relevant persons”). The Equity Shares are only available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such Equity Shares will be engaged in only with, relevant persons. Any person who is
not a relevant person should not act or rely on this document or any of its contents.
8
PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA
Certain Conventions
References in this Draft Letter of Offer to “India” are to the Republic of India. All references to the “US”, or the
“U.S.A.” or the “United States” are to the United States of America and all references to “UK” or the “U.K.” are to
the United Kingdom.
Financial data
Unless stated otherwise, the financial data in this Draft Letter of Offer is derived from our Company's audited and
restated consolidated financial statements. Our Company's Financial Year commences on April 1 and ends on
March 31 of the following calendar year except for:
Fiscal 2008, which commenced on July 1, 2007 and ended on March 31, 2008;
Fiscal 2012, which commenced on April 1, 2011 and ended on September 30, 2012; and
Fiscal 2013, which commenced on October 1, 2012 and will end on March 31, 2013.
Our Company prepares its financial statements in accordance with the generally accepted accounting principles in
India, which differ, in certain respects, from generally accepted accounting principles in other countries. Indian
GAAP differs, in certain significant respects, from the International Financial Reporting Standards. Our Company
publishes its financial statements in Indian Rupees. Any reliance by persons not familiar with Indian accounting
practices on the financial disclosures presented in this Draft Letter of Offer should accordingly be limited. We have
not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge
you to consult your own advisors regarding such differences and their impact on our financial data.
In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are
due to rounding off and, unless otherwise specified, all financial numbers in parenthesis represent negative figures.
For definitions, please see the chapter entitled “Definitions and Abbreviations” at page 1.
Market and Industry data
Unless stated otherwise, market, industry and demographic data used in this Draft Letter of Offer has been obtained
from market research, publicly available information, industry publications and government sources. Industry
publications generally state that the information that they contain has been obtained from sources believed to be
reliable but that the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys,
industry forecasts and market research, while believed to be reliable, have not been independently verified and
neither our Company nor the Lead Manager makes any representation as to the accuracy of that information.
Accordingly, Investors should not place undue reliance on this information.
Currency of presentation
All references in this Draft Letter of Offer to “Rupees”, “`”, “Rs.”, “Indian Rupees” and “INR” are to Indian
Rupees, the official currency of India. All references to “U.S. $”, “U.S. Dollar”, „USD” or “$” are to United States
Dollars, the official currency of the United States of America. All references to “EUR”, “€” or “Euro” are to Euro,
the official currency of the European Union. All references to “MUR” are to Mauritian rupee, the official currency
of Mauritius. All references to “MYR” or “RM” are to Malaysian Ringgit, the official currency of Malaysia. All
references to “NPR” are to Nepalese Rupee, the official currency of Nepal. All references to “GBP” or “£” are to
Pound Sterling, the official currency of the UK.
9
Please Note:
One lakh is equal to 100,000/100 thousand
One million is equal to 10,00,000/10 lakhs
One billion is equal to 1,000 million/100 crores
One crore is equal to 10 million/100 lakhs
Exchange rates
Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent of the
Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the conversion into
U.S. Dollars of any cash dividends paid in Rupees on the Equity Shares.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between the
Rupee and the U.S. Dollar (in Rupees per U.S. Dollar) based on the reference rates obtained from www.rbi.org.in.
No representation is made that the Rupee amounts actually represent such amounts in U.S. Dollars or could have
been or could be converted into U.S. Dollars at the rates indicated, at any other rates or at all.
12 months ended March 31 Period End Average* High* Low*
2009 50.95 45.91 52.06 39.89
2010 45.14 47.42 50.53 44.94
2011 44.65 45.58 47.57 44.03
2012 51.16 47.95 54.24 43.95
Eighteen months ended September 30,
2012
52.70 50.25 57.22 43.95
Month ended Period End Average* High* Low*
August 2012 55.72 55.56 56.08 55.15
September 2012 52.70 54.61 55.97 52.70
October 2012 54.12 53.02 54.17 51.62
November 2012 54.53 54.78 55.70 53.66
December 2012 54.78 54.65 55.09 54.20
January 2013 53.29 54.32 55.33 53.29
February 2013 53.77 53.77 54.48 52.97
Source: website at www.rbi.org.in
*Note: Average, High and low have been obtained from www.rbi.org.in as the average of all the rates available during the period,
the maximum of all the rates available during the period and the minimum of all the rates available during the period
respectively. The reference rate on March 8, 2013 was U.S. $1.00 = ` 54.40.
10
FORWARD LOOKING STATEMENTS
Certain statements in this Draft Letter of Offer are not historical facts but are “forward-looking” in nature. Forward
looking statements appear throughout this Draft Letter of Offer, including, without limitation, under the chapters
entitled “Risk Factors”, “Management's Discussion and Analysis of Financial Condition and Results of
Operations”, “Industry” and “Business”. Our Company may, from time to time, make written or oral forward-
looking statements in reports to Equity Shareholders and in other communications. Forward-looking statements
include statements concerning our Company‟s plans, objectives, goals, strategies, future events, future revenues or
financial performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our
Company‟s competitive strengths and weaknesses, our Company‟s business strategy and the trends our Company
anticipates in the industries and the political and legal environment, and geographical locations, in which our
Company operates, and other information that is not historical information.
Words such as “believe”, “anticipate”, “estimate”, “seek”, “expect”, “continue”, “intend”, “predict”, “project”,
“should”, “goal”, “future”, “could”, “may”, “will”, “would”, “targets”, “aims”, “is likely to”, “plan” and similar
expressions, or variations of such expressions, are intended to identify forward-looking statements but are not the
exclusive means of identifying such statements.
By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and
risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.
These risks, uncertainties and other factors include, among other things, those listed under the chapter entitled “Risk
Factors”, as well as those included elsewhere in this Draft Letter of Offer. Prospective investors should be aware
that a number of important factors could cause actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are
not limited, to:
Our inability to effectively implement our business and growth strategies;
Our ability to effectively respond to competition and changes in technology;
Prevention of piracy;
Reduction in our advertising/sponsorship revenue;
Reduction or termination of our tax incentives;
Success of the films that we exhibit; and
Competition from other entertainment avenues.
For a further discussion of factors that could cause our Company‟s actual results to differ, see the chapters entitled
“Risk Factors” and “Business” at pages 11 and 165, respectively. By their nature, certain market risk disclosures are
only estimates and could be materially different from what actually occurs in the future. As a result, actual future
gains or losses could materially differ from those that have been estimated. Neither our Company nor the Lead
Manager make any representation, warranty or prediction that the results anticipated by such forward-looking
statements will be achieved, and such forward-looking statements represent, in each case, only one of many
possible scenarios and should not be viewed as the most likely or standard scenario. Neither our Company nor the
Lead Manager nor any of their respective affiliates or advisors have any obligation to update or otherwise revise any
statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events,
even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock Exchanges
requirements, our Company and Lead Manager will ensure that Investors in India are informed of material
developments until the time of the grant of listing and trading permissions by the Stock Exchanges.
11
SECTION II: RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in
this Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in our
Equity Shares. The risks and uncertainties described in this section are not the only risks that we currently face.
Additional risks and uncertainties not known to us or that we currently believe to be immaterial may also have an
adverse effect on our business, results of operations and financial condition. If any of the following risks, or other
risks that are not currently known or are now deemed immaterial, actually occur, our business, results of operations
and financial condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of
your investment.
The financial and other related implications of risks concerned, wherever quantifiable, have been disclosed in the
risk factors mentioned below. However, there are risk factors where the effect is not quantifiable and hence the
same has not been disclosed in such risk factors.
To obtain a complete understanding, you should read this section in conjunction with the chapters entitled
“Business” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” as well
as the other financial and statistical information contained in this Draft Letter of Offer.
Unless otherwise stated, the financial information of our Company used in this section is derived from our restated
consolidated financial statements.
Internal Risks
1. There are certain criminal cases pending against us, our Directors, our Promoters, our Group Companies
and our Joint Ventures.
There are 115 criminal proceedings pending against us, our Directors, our Promoters, our Group Companies and our
Joint Ventures before various fora and are at various stages of adjudication. The impact of these litigations cannot be
quantified. For details of all the pending criminal actions and cases against us, our Directors, our Promoters, our
Group Companies and our Joint Ventures, please see the chapter entitled “Outstanding Litigations and other
Material Developments” at page 312.
2. Gautam Doshi, one of our non-executive Directors, is currently being investigated by the Central Bureau of
Investigation.
The Central Bureau of Investigation (CBI) has registered a first information report (FIR) dated October 21, 2009
pertaining to allegations of criminal conspiracy and criminal misconduct, in respect of telecommunications licences
and spectrum allotted by the Government of India inter alia to SwanTelecom Limited in 2008. Pursuant to the FIR,
the CBI filed a charge sheet dated April 2, 2011 in the Court of Special Judge (CBI), New Delhi, against various
persons, including one of our non-executive Directors, Gautam Doshi. The Special Judge (CBI) has framed charges
against all the persons specified in the charge sheet.
Proceedings in the matter, including a writ petition that Gautam Doshi has preferred to the High Court at Delhi, are
ongoing. For further details, please see the chapter entitled “Outstanding Litigation and Material Developments” at
page 312.
3. We have incurred losses in the past and, at present, we have a negative net worth.
We incurred net losses of `32,816.99 lakhs and `12,803.24 lakhs in Fiscal 2011 and Fiscal 2010, respectively.
Further, for the 18 months ended September 30, 2012 (Fiscal 2012), we incurred a net loss of ` 91,016.62 lakhs and
our net worth as at September 30, 2012, reduced to ` (58,149.80) lakhs. For further details, please see the chapter
entitled “Financial Statements” at page F1. In addition, our ability to pay dividends will depend upon a number of
12
factors, including, amongst others, our profitability, our results of operations, earnings, capital requirements and
surplus, general financial conditions, contractual restrictions and applicable Indian and foreign legal restrictions. Our
financial position may accordingly be perceived adversely by external parties such as customers and bankers, which
may affect our reputation and business operations.
4. Our net worth has decreased substantially over the last three years which restricts our ability to invest in our
overseas subsidiaries and joint ventures and may hamper our growth plans.
Our Company‟s net worth on a standalone basis has decreased from `66,641.08 lakhs as on March 31, 2008 to `
(20,451.53) lakhs as on September 30, 2012. In terms of the applicable FEMA regulations, we may not invest in our
joint ventures or wholly owned subsidiaries situated outside India in excess of 400% of our Company‟s net worth as
on the last audited balance sheet. This limit includes contribution to the capital of, loans granted to, and guarantees
issued to or on behalf of, the overseas joint ventures or wholly owned subsidiaries. As on December 31, 2012 we
have invested ` 74,363.64 lakhs in our overseas subsidiaries and joint ventures. Accordingly, we will not be able
invest in our overseas joint ventures or wholly owned subsidiaries till our net worth increases significantly, which
may have an adverse impact on our future growth plan.
5. If we are unable to effectively implement our business and growth strategies, our results of operations may
be adversely affected.
Our success will depend, in large part, on our ability to effectively implement our business and growth strategies.
We cannot assure you that we will be able to execute our strategies in a timely manner or within budget estimates or
that we will meet the expectations of targeted customers. We believe that our business and growth strategies will
place significant demands on our management and other resources and will require us to develop and improve
operational, financial and other internal controls. Our business and growth strategies may require us to incur further
indebtedness. Any inability to manage our business and growth strategies could adversely affect our business,
financial condition and results of operations.
As part of our growth strategy, we propose to increase the number of cinema theatres we operate in India and other
countries with Indian diaspora. When establishing new cinema theatres, we may encounter cost overruns or delays
in implementation due to, among other causes, delays in construction, receipt of government approvals or delivery
of equipment by suppliers. For instance, the Image Maximum (IMAX) Dome theatre scheduled to be established in
Mumbai in December 2000 was not established until March 2001. In addition, the four screen multiplex project
scheduled to be established in Mumbai in September 2001 was not fully established until November 2001. In the
future, if any cinema theatres are not established in a timely manner, or at all, our business and results of operations
may be adversely affected. Further, we were scheduled to complete construction of all three stages of our studio by
December 2011. However, while we completed one stage by January 2011, we are yet to complete construction of
the other stages.
New cinema theatres we establish may not achieve anticipated levels of patronage and as a result may not perform
as expected. The occurrence of any of these risks could adversely affect our business, financial condition, and results
of operations.
6. Our Company’s high debt-equity ratio may hamper our ability to avail of future debt
As of September 30, 2012, our Company‟s total outstanding borrowing was `201,220.40 lakhs against our
Company‟s net worth of ` (20,451.53) lakhs as of September 30, 2012 and EBITDA of ` (20,505.74) lakhs for
Fiscal 2012. Further, our Company‟s total outstanding borrowing increased to ` 210,882.50 lakhs as on January 31,
2013. Our Company‟s high debt leverage may make it difficult for us to raise finance, on terms favourable to us or
at all. While one of the objects of this Issue is to pre-pay / repay some of our Company‟s existing borrowings, there
can be no assurance that the improvement in the debt-equity ratio, upon repayment of such existing borrowings, will
facilitate raising additional debt on favourable terms. If our Company‟s highly levereaged debt profile continues, or
worsens, it will have a significant impact on our business, results of operations and financials.
13
7. Our Company has delayed the repayment of certain loans.
During Fiscal 2012, our Company has delayed the repayment of the following loans:
Nature of loan Principal amount (` in
lakhs)
Due date Date of payment
Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012
Secured term loan 13,333.33 March 31, 2012 May 11, 2012
Secured term loan 1,250.00 December 16, 2011 December 30, 2011
Secured term loan 1,000.00 May 3, 2012 May 6, 2012
Delay in repayment of the abovementioned loans may not only constitute a default under the respective loan
agreements but may also affect our ability to raise further debt. Consequently, our inability to raise further debt may
adversely affect our business, financial condition and results of operations. While none of the abovementioned loans
has been recalled by any lender so far, there can be no assurance that they may not be recalled in future.
8. If we cannot respond effectively to competition, our financial condition and results of operations may be
adversely affected.
We face competition in the various segments of the entertainment and media industry in which we operate. During
Fiscal 2012, Fiscal 2011 and Fiscal 2010, our theatrical exhibition business constituted 69.99%, 65.39% and
64.37%, respectively of our total consolidated revenues. We cannot assure you that this business segment will
continue to contribute to our consolidated revenue at similar levels. Increased competition resulting from the growth
of other theatrical exhibitors‟ operations may reduce attendance in our cinema theatres, which could adversely affect
our financial condition and results of operations.
In addition, our theatrical exhibition business competes with alternative film delivery methods, including cable
television, Internet, digital video disc, satellite and pay-per-view services. Film distributors, while licensing a film to
the domestic theatrical exhibition industry, have traditionally refrained from making the same film available through
other film delivery methods for a certain period of time, a practice commonly referred to as the “theatrical release
window”. If film distributors significantly reduce the duration of the theatrical release window, the appeal of
viewing films in cinema theaters may be reduced, which may adversely affect our business, financial condition and
results of operations.
We are also engaged in the business of television content production, an area which has witnessed increasing levels
of competition.
Our costs related to marketing and human resources may increase due to such increased competition. Further, our
competitors may expand their financial and other resources in an attempt to increase their market share. If we are
unable to adequately address such competitive pressures, our business and financial condition may be adversely
affected.
9. Piracy may reduce attendance at our cinema theatres, which may adversely affect our business and financial
condition.
Piracy, i.e., making available unauthorised copies of media content, software or other digital content at highly
reduced prices or without charge, is prevalent throughout the world, including India. Anti-piracy laws may not be
adequate or may be inadequately enforced in the jurisdictions in which we operate. The availability of pirated copies
of films may cause some of our potential customers to be less inclined or completely disinclined to visit cinema
theatres, which may adversely affect our business and results of operations.
14
Our business is highly dependent on the maintenance of intellectual property rights in the entertainment products
and services we create and exhibit. Piracy of media products, including digital and Internet piracy and the sale of
counterfeit consumer products, may decrease revenues received from the exploitation of our products. The move to
digital formats has facilitated high-quality piracy, particularly through the Internet and cable television. We may
face difficulties in monitoring infringement of our intellectual property rights. The Indian film industry experiences
significant amounts of losses due to piracy. Existing copyright and trademark laws in India afford only limited
practical protection and the lack of Internet-specific legislation relating to trademark and copyright protection
creates a further challenge for us to protect our content delivered through such media. Notwithstanding the anti-
piracy measures we take, we cannot assure you that we will be able to prevent piracy of our products.
10. Our Auditors have qualified their audit report.
Our auditors have qualified their audit report in respect of our consolidated financial statements for Fiscal 2012 and
Fiscal 2011.
In the audit report on consolidated financial results for Fiscal 2012, our Auditors have drawn attention to the
recognition of Deferred Revenue Expenditure aggregating ` 1,213.81 lakhs pertaining to start up and stabilization
costs of the business of Reliance MediaWorks Entertainment Services Limited, one of our subsidiaries, since the
recognition is not in accordance with the relevant accounting standard.
If our Company had recognised these losses in Fiscal 2012, the loss for the said period would have been higher by `
1,213.81 lakhs.
Further, our Auditors have in the report on restated standalone financial information drawn attention to the fact that
the networth of our Company has fully eroded on account of loss of `70,356.34 lakhs (as restated) for Fiscal 2012.
In addition, our Auditors have in the report on restated consolidated financial information drawn attention to the fact
that the networth of our Company has fully eroded on account of loss of ` 91,016.62 lakhs (as restated) for Fiscal
2012.
The erosion of networth, in their view, indicates an uncertainty that may cast a doubt about our Company‟s ability to
continue as a going concern.
We cannot assure you that our net worth will not decrease further. For further details, please see the chapter entitled
“Financial Statements” at page F1.
11. Our pro forma financial statements have not been audited or reviewed by our Auditors.
Our Company is proposing to undertake internal restructuring of its business by transferring its whole or part of
theatrical exhibition business and film and media services to certain of its wholly owned subsidiaries which it is yet
to identify and our shareholders have approved the same proposal on February 21, 2012 through postal ballot.
Accordingly, our Company has prepared pro forma financial statements which assume the transfer of our
Company‟s film and media services and theatrical exhibition business division to our subsidiaries at book values.
For the purpose of the transfer, it is assumed that all assets which form part of business division assets and business
division liabilities are transferred to the subsidiaries of the Company and the amount receivable as consideration on
transfer is shown as a short term loan and advance recoverable from these subsidiaries.
The pro forma financial information has been prepared by our management and has not been audited or reviewed by
our Auditors. It may not necessarily be indicative of the net results of operations that might have been achieved by
the Company for period or dates indicated, nor is it necessarily indicative of the future results of the Company after
such proposed internal restructuring.
For further details, please see the chapter entitled “Financial Statements” at page F1.
15
12. We have not received consents for transferring our film and media services and theatrical exhibition
business to our subsidiaries from some of our lenders.
We are in the process of transferring our film and media services and theatrical exhibition business to certain of our
wholly owned subsidiaries which we will identify in due course. The shareholders of our Company have approved
the transfer through a resolution dated February 21, 2012.
In terms of the financing agreements with our lenders we are required to obtain their prior consent for, amongst
other, transferring our business. While we have received consents from certain lenders, we have not received
consent from all. Further, the consents received are also subject to certain conditions including:
that there should be no material change to the security offered to the lenders and the assets transferred
should continue to secure the exposure;
the relevant subsidiaries or our Company, as the case may be, should ensure sufficient cash flows to meet
the repayment obligations;
that our Company has received necessary approval from all lenders; and
that we would continue to comply with the terms and conditions of the financing documents.
Non-receipt of the requisite consents in time or at all from the lenders may either hamper the process of
transferring our film and media services and theatrical exhibition business to certain of our wholly owned
subsidiaries or we may be forced to repay the debt due to them.
13. Changes in technology may render our current technologies obsolete or require us to undertake substantial
capital investments, which could adversely affect our results of operations.
Technologies currently under development or that may be developed in the future, if employed by our existing
competitors or new entrants, may adversely affect our competitiveness. The development and application of new
technologies involve time, substantial cost and risk. Our competitors may be able to deploy new technologies before
us and we cannot predict how emerging and future technological changes will affect our operations or the
competitiveness of our services. If we fail to successfully implement new technologies in a timely manner or at all,
our business, financial condition and results of operations may be adversely affected.
We are engaged in the business of film and media services and currently have a production laboratory in Mumbai
and a post-production services facility in Burbank, USA and London, UK. Our film and media services business
generated ` 27,802.90 lakhs, `23,265.50 lakhs and `15,764.30 lakhs for Fiscal 2012 and Fiscals 2011 and 2010,
respectively, which constituted 22.55%, 27.82% and 21.72%, respectively, of our total consolidated revenues for the
said periods. However, new technologies may replace traditional film production methods which may adversely
affect our business and results of operations.
In relation to our theatrical exhibition business, digital projection technology may replace traditional analogue film
projection technology in cinema theatres. Digital projection technology is more expensive to implement and operate
than analogue film projection technology. While 334 of our screens were equipped with digital projection
technology as of January 31, 2013, to remain competitive in the future, we may be required to implement and
operate digital projection technology in more of our cinema theatres, which would require significant investments of
time, financial resources and personnel attention that may adversely affect our financial condition. Further, if we are
unable to implement digital projection technology in our cinema theatres in a timely manner, or at all, we may lose
patronage which could adversely affect our business and financial condition, specifically in the US.
16
14. If the exhibition of films through megaplexes becomes more popular in India, our business and results of
operations may be adversely affected.
Changes in technology and the availability of real estate have significantly altered the global theatrical exhibition
industry. Multiplexes, a cinema theatre format that typically comprises four to five screens may, in the future, be
substantially replaced by megaplexes, a cinema theatre format that typically comprises 14 to 15 screens. The
megaplex format has achieved popularity in many developed markets, including the United States. In these markets,
the industry-wide strategy of aggressively building megaplexes has generated significant competition and has
rendered many multiplexes obsolete. If the exhibition of films through megaplexes becomes more popular in India,
we may be required to make significant investments to shift our theatrical exhibition business towards the
establishment and operation of megaplexes, which could adversely affect our business, financial condition and
results of operations.
15. Reduction in our advertisement/ sponsorship revenues could have an adverse effect on our results of
operations.
During Fiscal 2012, Fiscals 2011 and 2010, we had ` 3,498.40 lakhs, `3,684.20 lakhs and `4,651.70 lakhs of
advertisement/sponsorship revenue, respectively. This constituted 2.79%, 4.33% and 6.22%, respectively, of our
total consolidated revenue for the same periods. We generally utilise our existing cinema infrastructure to display
advertisements for our advertising customers. Our gross margin on advertisement revenue is high as we do not incur
significant additional cost for each additional amount of advertisement revenue we earn. Consequently, changes in
our advertisement revenue will have a larger percentage impact on our profit before tax than changes in some of our
other sources of revenue.
16. The cost of exhibition of a film varies across films and cinemas and if we are unable to obtain films on
competitive terms, our results of operations may be adversely affected.
We rely on distributors to obtain films for exhibition. In order to obtain a film for exhibition, we enter into
agreements in which the distributor‟s share is typically calculated as a percentage of ticket receipts (net of
entertainment taxes and other applicable taxes). The applicable percentage is negotiated on a film-to-film basis in
respect of films produced in India and periodically for film releases by international studios. Distributors work on a
non-exclusive basis and there is competition between exhibitors to acquire films. Competitive pressures may result
in increasing the cost at which we acquire the rights to exhibit films. If we are unable to recover such increased costs
through higher box office collections or other forms of revenue generation, our results of operations would be
adversely affected.
17. In the event of any reduction or termination of any of our tax incentives or, specifically, if a state
Government refuses to grant, withdraws or reduces its entertainment tax incentive, our business and results
of operations may be adversely affected.
We benefit from certain tax regulations and incentives. Specifically, we are subject to entertainment taxes in various
states in India in which we operate our cinema theatres. The applicable entertainment tax is determined by the
relevant state as a percentage of our gross box office collections in that state. The rates vary substantially from state
to state. We are eligible for entertainment tax exemption for certain of our cinema theatres, which is typically
staggered over a period of time. In addition, we also enjoy full entertainment tax exemption in respect of certain of
our cinema theatres in Punjab and Rajasthan. When deciding whether to open a new cinema theatre, we consider the
availability of entertainment tax holidays and incentives given by various state Governments. Typically, the
developer, from whom we propose to acquire a new property, files an application for the grant of an entertainment
tax exemption with respect to the relevant property. If a state Government refuses to grant, withdraws, or reduces its
entertainment tax incentive, our business, financial condition and results of operations may be adversely affected.
Further, in certain instances, we are required to operate a cinema theatre for a certain period of time in order to avail
of certain tax incentives. If we fail to operate a cinema theatre for the required period of time, we will not be eligible
17
for the tax incentive and will have to pay taxes in arrears, which may adversely affect our financial condition and
results of operations.
18. Certain equipment for the construction of our studio and some of our cinema theatres may not be received in
a timely manner, or at all, which could adversely affect our business and results of operations.
We are currently in the process of constructing a studio in Film City, Mumbai. As part of the construction process,
we have placed orders for certain equipment. However, based on our estimates, we are yet to place orders for large
number of equipment. Similarly, we are yet to place orders for certain equipment for new cinema theatres that we
are constructing. If we do not receive any such equipment in a timely manner, on favourable terms, or at all, the
construction of our studio and cinema theatres may be delayed or prevented, which could adversely affect our
business, financial condition and results of operations.
19. Our business and growth strategies involve the pursuit of strategic acquisitions, and any difficulties
encountered in identifying or integrating other entities may adversely affect our financial condition and
results of operations.
Our growth strategy involves the acquisition of new businesses. For example, we have acquired Rave Entertainment
Private Limited, Synergy Communications Private Limited (now, “Big Synergy Media Limited”), iLab and
Reliance Lowry Digital Imaging Services Inc. (“Lowry Digital”) between the financial years 2007 and 2010 and the
assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-Reliance LLC, an associate
entity, in financial year 2012. Although as of the date of this Draft Letter of Offer, we have not entered into any
letters of intent, memoranda of understanding or agreements regarding contemplated acquisitions, we intend to
continue to evaluate options for acquisitions that may improve our businesses and service offerings. We may be
unable to complete future acquisitions on terms acceptable to us, in a timely manner, or at all. Our acquisitions may
require that our management develop new expertise, manage new business relationships, attract new customers and
operate in new geographic markets. Furthermore, acquisitions require the devotion of significant attention and
resources from our management, and the diversion of our management, attention and resources could adversely
affect our ability to manage our business.
In addition, we cannot assure you that the integration of any future acquisitions will be successful or that the
expected strategic benefits or synergies of any future acquisitions will be realised. We may experience difficulties in
integrating acquisitions into our existing business and operations. Future acquisitions may expose us to potential
risks including risks associated with the integration of new operations, services or personnel, unforeseen or
unaccounted liabilities, the diversion of resources from our existing businesses and technologies, our inability to
generate sufficient revenue to offset the costs of acquisitions, and potential loss of, or harm to, relationships with
employees or customers, any of which could significantly disrupt our ability to manage our business and in turn
adversely affect our business, financial condition and results of operations.
20. If we are unable to obtain or renew approvals in a timely manner, or at all, our business and results of
operations may be adversely affected.
As of January 31, 2013 we operated 121 cinema theatres with 452 screens across India and the United States. In
order to operate each of these cinema theatres, we must obtain certain approvals, many of which we must renew
from time to time. In addition, as we expand our business and open new cinema theatres, we will require additional
approvals for these new locations. If we fail to obtain or renew any applicable licences, registration or permits in a
timely manner, or at all, our ability to operate our cinema theatres may be adversely affected, which could in turn
adversely affect our business, financial condition and results of operations.
The approvals and licences obtained by us may contain conditions, some of which could be onerous. We cannot
assure you that the approvals, licences, registrations or permits issued to us would not be suspended or revoked in
the event of non-compliance or alleged non-compliance with any terms or conditions thereof, or pursuant to any
18
regulatory action. Any suspension or revocation of any of the approvals, licences, registrations or permits that have
been or may be issued to us may adversely affect our business and results of operations.
21. Failure to complete contracts, which have a fixed-time frame, as scheduled may negatively affect our
profitability and may result in increased expenses due to repetition of work.
We derive a significant portion of our earnings from our post-production services on a fixed-time frame basis. In
respect of such fixed-time post-production services, we bear the risk of penalty provisions, cost overruns,
completion delays and wage inflation in connection with these projects. Our failure to estimate the resources and
time required for a project, including as a result of uncertainties due to creativity issues, may adversely affect our
reputation, business, financial condition and results of operations. In addition, our post-production agreements
require that we redo the production of content that is rejected by clients on grounds of such content not complying
with specifications. Such agreements also provide for penalty clauses where we are liable to pay penalties for any
delay in the completion and handover of the material being produced under the agreement. We cannot assure you
that we will always complete the production of material under our post-production arrangements on time or that
such material will be accepted by our clients. Any inability to complete these post-productions in a timely manner or
in accordance with client specifications could adversely affect our business, financial condition and results of
operations.
22. Procurement of new contracts for our post-production business is subject to negotiations, financial closure
and initial quality tests. Our inability to procure new contracts could affect our future results of operations
and cash flows.
The growth of our business depends on our ability to win new contracts. Generally, it is difficult to predict whether
and when we will be awarded a new contract since many potential contracts involve negotiations with our clients
and also financial closure prior to signing definitive agreements. The process also involves initial quality tests which
are normally done by way of pilot productions and subject to approval by the clients. As the growth of our business
will be derived primarily from these contracts, our future results of operations and cash flows can fluctuate
materially from period to period depending on the timing of contract awards.
23. If the number of unsuccessful films in the film industry increases, our business, financial condition and
results of operations may be adversely affected.
Our business relies heavily on the success of the films we exhibit. Our potential cinema theatre patrons may be
inclined to visit our theatres in significant part based on the appeal of the films we exhibit, irrespective of the
services, technologies and amenities we offer. Typically, we are also able to raise the profile of our film and media
services business through association with successful films. A film‟s success cannot be predicted through the use of
any definite formula or study of prior successful films. Consequently, the success of a new film may be difficult to
predict. We cannot assure you that box office collections of films with well-known casts or previously successful
content will be successful. If the number of unsuccessful films in the film industry increases, our business, financial
condition and results of operations may be adversely affected.
24. We operate most of our cinema theatres through agreements with the owners and / or developers of the
relevant properties, which entail certain risks.
As of Janruary 31, 2013 we operated 121 cinema theatres with 452 screens across India and the United States. We
operate a vast majority of our cinema theatres through a lease on the relevant property, a business conducting
agreement or a management agreement to operate the relevant property as a cinema theatre. We cannot assure you
that we will be able to enter into or renew business conducting agreements for our cinema theatres that are of the
same duration as the relevant property leases on favourable terms, or at all. In the event that a business conducting
agreement or lease is not renewed, we will be required to expend time and financial resources to relocate the cinema
theatre, which may adversely affect our financial condition. We cannot assure you that we will be able to relocate a
cinema theatre to an appropriate location in a timely manner, or at all. There can be no assurance that a relocated
19
cinema theatre will generate revenues at levels equal to those generated at the previous location. Further, if any lease
or business conducting agreement is terminated, revoked subsequent to the lock-in period and prior to tenure, not
renewed or if we are required to cease business operations at a property for any reason whatsoever, our business,
financial condition and results of operations may be adversely affected. After such termination, if the relevant
property is leased or sold to another theatrical exhibition company, we may face increased competition in that
geographic area. We operate some of our cinema theatres inside shopping malls and if the operator of a shopping
mall has not obtained certain approvals, our ability to operate such cinema theatres may be adversely affected.
While we pay stamp duty on our business conducting agreements, these agreements may be treated as lease under
relevant stamp legislation. In such event, we would be required to pay a higher stamp duty and might also be
required to pay penalties in accordance with the relevant stamp duty legislation. If any of our business conducting
agreements is treated under relevant stamp duty legislation as a lease, our business and financial condition may be
adversely affected.
25. We are dependent on the services of key management personnel and our ability to recruit and retain skilled
and experienced employees.
In order to successfully manage and expand our business, we are dependent on the services of key management
personnel and our ability to attract, train, motivate and retain skilled employees, including artists, technicians and
other professionals. If we are unable to hire additional personnel or retain existing qualified personnel, our ability to
expand our business may be impaired and our revenues may decline. We may be unable to hire and retain enough
skilled and experienced employees to replace those who leave or may not be able to re-deploy. In addition, we do
not maintain key man insurance. We also may be unable to retain the proper mix of employees to follow industry
trends and changing customer preferences. Any failure to hire or retain key management personnel and skilled and
experienced employees could adversely affect our business and results of operations.
26. Conditions and restrictions imposed on us by the agreements governing our indebtedness could adversely
affect our ability to operate our businesses.
Certain of our financing agreements include conditions and restrictive covenants that require us to obtain consents
from the respective lenders prior to carrying out certain activities and entering into certain transactions. Our lenders
have certain rights to determine how we operate our businesses, which, among other things, restrict our ability to
raise additional equity, pay dividends, make investments, effect a change in ownership, amend our Memorandum
and Articles of Association, undertake a merger, amalgamation or reconstruction, make changes in our management,
incur additional long-term indebtedness, sell assets or acquire other businesses. We cannot assure you that we will
be able to obtain approvals to undertake any of the activities restricted under these financial covenants as and when
required in respect of such restrictions or comply with such covenants or other covenants in the future.
Further, these debt obligations are typically secured by a combination of security interests over our assets and
hypothecation of movables and future receivables. The security allows our lenders to sell the relevant assets in the
event of our default, convert outstanding debt into equity, nominate directors to our Board or exercise other such
related rights.
Under such financing agreements, we are also required to comply with certain financial covenants, such as the
maintenance of certain specified financial ratios, including a ratio of gross borrowings to tangible net worth, which
may limit our ability to obtain additional funds. We currently are not in compliance with some of these financial
ratios; however the relevant lenders have not yet recalled any of these loans. If we are unable to maintain these
ratios, the lenders are entitled to declare the loans due immediately. In addition, certain of the loan agreements
contain cross-default provisions, whereby a default of any of the covenants under any one of financing agreements
may result in an event of default under other financing agreements or respective concession or licence agreements. If
we do not repay the outstanding loan amounts in a timely manner or at all, our business, reputation and financial
condition may be adversely affected. Further, our Company has used short term borrowings for long term
20
investments during Fiscals 2012, 2011 and 2010. For further details, please see the chapter entitled “Financial
Statements” at page F1.
If we incur more debt or there is an increase in the applicable interest rates for our existing debt, our interest
payment obligations will increase and we may become subject to additional conditions from lenders, including
additional restrictions on the operation of our businesses. The financing agreements that we are party to or which we
may enter into in the future may be unilaterally terminated by our lenders or the lenders could decline to lend to us
under such agreements. Further, we cannot assure you that we will be able to raise additional financing on
favourable terms, or at all. Any failure in the future to obtain sufficient financing could result in a lack of cash flow
to meet our operating requirements and, therefore, could have an adverse effect on our business, financial condition
and results of operations.
27. Our Company, Subsidiaries, Promoters, Group Companies and associate companies of our Company have
availed of unsecured loans that may be recalled by lenders at any time.
Our Company, Subsidiaries, Promoters, Group Companies and associate companies of our Company have availed of
unsecured loans which may be recalled by the lenders at any time. Any accelerated repayment of such loans may
adversely affect the cash flow and results of operations of such entities. We may also require alternative sources of
financing, which may not be available on commercially reasonable terms or at all. For further details in relation to
the unsecured loans obtained by our Company, please see the chapter entitled “Financial Indebtedness” at page 254.
28. If we are unable to recover certain amounts outstanding in relation to our film and media services business,
our financial condition and results of operations may be adversely affected.
Certain risks are involved in relation to the film and media services industry practice of extending credit for long
periods of time and the uncertainty regarding the receipt of certain outstanding amounts due. Due to these industry
conditions, we have and will continue to have high levels of outstanding receivables. As of September 30, 2012, we
had `9,288.38 lakhs of trade receivables in relation to our film and media services business. Given the nature of the
film and media services industry and our clients, billings are generally subject to negotiation at the time of
settlement. This often results in high levels of rebates, discounts and write-offs. Any increase in the levels of rebates,
discounts or write-offs given could increase our working capital requirements and could adversely affect our
business, financial condition and results of operations.
29. If a third party files an intellectual property infringement case against us, our business, reputation and
financial condition may be adversely affected.
A significant portion of our business involves intellectual property. The films exhibited at our cinema theatres and
television content we produce involve intellectual property rights of various entities. While we attempt to ensure that
necessary consents are obtained from third parties to acquire intellectual property rights for the distribution and
exhibition of films and the production of television content, third parties may file infringement cases against us or
may make us party to claims filed against third parties, such as producers. Such cases may not be decided in our
favour, which may result in the payment of damages and/or injunctive action. Further, the defense of any
infringement claim may consume significant time and financial resources. If a third party files an intellectual
property infringement action against us, our business, reputation and financial condition may be adversely affected.
30. If the strength of the “Reliance Group” brand name is diluted, our business and financial condition may be
adversely affected.
We believe that the “Reliance Group” brand name commands strong brand recall and interest among the Indian
population due to its long presence in the Indian market and the diversified businesses in which the Reliance Group
operates. Our success depends in part on our ability to leverage the strength of the “Reliance Group” brand name.
Any adverse change in the strength of the “Reliance Group” brand name, due to, among other reasons, an adverse
change among customers with regard to the perceived service quality of other companies in the Reliance Group,
21
could tarnish the “Reliance Group” brand and cause consumers be less interested in our products and services. If the
strength of the “Reliance Group” brand name is diluted for any reason, our business and financial condition may be
adversely affected.
31. We do not own several trademarks and a logo related to our business and if we are unable to enter into or
renew licence agreements for the use of these trademarks and logo, our business and financial condition
may be adversely affected.
We do not own the trademarks “Reliance MediaWorks” and “BIG Cinemas”. Reliance Big Entertainment Private
Limited has entered into an agreement for the use of the “BIG Cinemas” trademark.
We also do not own the “Reliance” trademark, the logo or the logo. We have entered into a
brand licence agreement with Anil Dhirubhai Ambani Ventures Limited for the use of the “Reliance” trademark and
the logo. Under the terms of the brand licence agreement, Anil Dhirubhai Ambani Ventures Limited may terminate
the agreement on various grounds, including, among others, our failure to pay our debt upon maturity, our
undergoing change of control or any attempt by us to claim any right of ownership in relation to the “Reliance”
trademark or the logo.
Brand recognition is critical to the successful operation and growth of our business. If we are unable to use the
trademarks or logo related to our business, we may be required to change our name and/or logo. Any such change
may lead to additional costs or dilute or eliminate the strength of our brand, which would have an adverse effect on
our business, financial condition and results of operations. For details, please see the chapter entitled “Business” at
page 165.
32. We may acquire new businesses, enter into strategic partnerships or undertake internal restructuring. If
such undertakings / activities do not yield the expected results, it may adversely affect our business, results of
operations and financial condition.
We may acquire or partner with companies that we believe will enhance our business, revenues and profitability, in
India or overseas, where suitable opportunities arise. We may also evaluate restructuring some of our business
divisions and subsidiaries including by transferring certain of our business divisions to our subsidiaries. We may
also evaluate various options to raise further capital, including through investments in our subsidiaries which may
have an impact on our shareholding in such subsidiaries. These activities, in general, involve numerous risks,
including:
diversion of our management‟s attention and diversion of resources from our existing business;
inability to control or loss of control over the business divisions or subsidiaries as a result of restructuring;
inability to coordinate product, development, sales and marketing functions of the acquired business;
inability to control the activities of the entities with whom we partner, including preventing such partner
from entering into similar arrangements with our competitors;
transition of operations, users and advertisers of the acquired business onto our existing platforms;
inability to retain the management, key personnel and other employees of the acquired business and
integrate them into our core workforce successfully and smoothly;
inability to assimilate the operations, administrative systems, product, technologies and information
systems of the acquired business with our core businesses; and
22
increase in investment of capital, which may increase our funding requirements as a result of acquisition or
restructuring.
In the event that any of the above risks materialises, we may not be able to manage such risks successfully or in a
timely manner or at all, which could have, our business, results of operations and financial condition may be
adversely affected. Further, acquired assets or business may not generate the financial results that we expect and we
may not be able to achieve the objective of any internal restricting that we may undertake. These activities involved
incurring substantial expenditure and employing significant time and other resources. In the event that these
activities fail to provide the expected results, our business, results of operations and financial condition may be
adversely affected.
33. Our Company does not own the premises where our Company’s Registered Office is situated and its
operations may be interrupted in case of inability to renew the lease agreement.
Our Company does not own the premises where our Company‟s Registered Office is situated. In terms of the lease
agreement with the Maharashtra Film Stage & Cultural Development Corporation Limited, our Company pays an
annual rent for the premises on which our registered office is situated. The rent is subject to an escalation every five
years. Additionally, our Company is liable to pay a consideration linked to the activities carried out by our
Company from the said premises. The lease has been granted for a term of 33 years (“Initial Term”) from October
21, 1996. The term of the lease shall be renewed for a further period of 33 years on an application made by our
Company, six months prior to the expiration of the Initial Term, on the same terms and conditions. In event our
Company fails to renew the lease agreement or if our Company is required to vacate the premises for any reason
whatsoever, our Company will have to search for alternative office space. There can be no assurance that our
Company will be able to obtain the same on similar terms or at all.
34. Contingent liabilities that have not been provided for could adversely affect our financial condition.
As of September 30, 2012, we had certain contingent liabilities that had not been provided for, as disclosed in our
restated consolidated financial statements. The details of such contingent liabilities are as follows:
(` in lakhs)
Particulars As of September 30, 2012
Central excise 2,555.90
Service tax 204.90
Income tax 4,205.50
Entertainment tax 13,655.30
Value Added Tax 38.40*
Claims against our Company not acknowledged as debts 7,859.80
Guarantees given to bank and others for loans/credit
facilities given to others 183.00
Contingent liabilities of Subsidiary Companies 536.90
Share of contingent liabilities in the Joint Ventures 98.00 * The Maharashtra Value Added Tax Act, 2002 lists the scheduled entry, inter alia, “Copy right” w.e.f. 1 April 2005. Pursuant to
this enactment / scheduled entry, the entertainment industry has made a written representation to the Finance Minister,
Maharashtra for deletion of the scheduled entry from the Act. Similar representation was made by the industry in some other
states, as a result of which the Maharashtra Value Added Tax Act, 2002 was modified to delete this scheduled entry. Our
Company is awaiting a positive response from the Ministry of Finance in respect of the assurance given. Accordingly, no
provision (amount not currently ascertainable) has been made in the books of accounts.
With effect from the May 1, 2011 the Maharashtra Value Added Tax Act, 2002 was amended to exempt tax on “Copyrights” for
distribution and exhibition of cinematographic films in theatres and cinema halls.
If any of these liabilities materialises, our financial condition could be adversely affected. For further details, please
see the chapter entitled “Financial Statements” at page F1.
23
35. The financial statements of our Company for the previous years may not be comparable to each other.
The financial statements of our Company for Fiscal 2012 are for the 18 months ended September 30, 2012 and the
financial statements of our Company for the Fiscal 2008 are for nine months ended March 31, 2008. The financial
statements of our Company for the Fiscals 2009, 2010 and 2011 are for Fiscal 2009, 2010 and 2011, respectively.
Consequently, our financial statements for these financial years are not comparable due to different accounting periods and
also because of the various schemes of arrangements and acquisitions undertaken by our Company. For further details,
please see the chapter entitled “History and Certain Corporate Matters” at page 189.
Further, our financial statements for Fiscals 2008 and 2009 reflect the accounting treatments prescribed in the schemes of
arrangements given effect to by our Company as approved by the respective High Courts. For further details of the
accounting treatments pursuant to the schemes of arrangements, please see the chapters entitled “History and Certain
Corporate Matters – Scheme of Arrangements” and “Financial Statements” at pages 189 and F1, respectively.
36. We are subject to the risk of theft and fraud / embezzlement by our employees, contractors and customers.
We are exposed to the risk of theft and embezzlement by employees, contractors and customers. While we carefully
recruit all of our employees and develop and revise appropriate procedures for the handling and transportation of
cash, equipment and intellectual property materials, we cannot assure you that our employees and customers will not
commit any acts of theft or embezzlement against us. The occurrence of any such acts could adversely affect our
reputation, business and financial condition.
Further, in the recent past, one of our contractors Laurent & Benton from whom we sourced human resources
committed a fraud on the contract labour employees aggregating approximately `294.20 lakhs. We have issued a
legal notice to the said contractor but we have not received a response from it. Should the contractor not be traced
we may be required to compensate Laurent & Benton‟s employees, which we may not be able to recover from
Laurent & Benton.
37. If our information technology systems are disrupted, our business and financial condition may be adversely
affected.
The day-to-day operations of our cinema theatres involve the use of information technology systems, including the
processing of advance bookings, ticket sales and billing processes. We also rely on our information technology
systems for carrying out routine corporate activities, such as processing of financial information and management of
our accounts. Any disruption of our information technology systems may adversely affect our business, financial
condition and results of operations.
38. If there is a dispute or a strike within the Hindi or United States film industry, our business may be adversely
affected.
In India, the Hindi film industry was significantly affected by a dispute between multiplex operators and film
distributors that led to a strike by multiplex operators between April 2009 and June 2009. The said strike adversely
impacted our ability to exhibit any Hindi films in our multiplexes. Although the strike was eventually resolved, our
domestic theatrical exhibition revenues suffered. Our theatrical exhibition revenue, on a standalone basis, was
significantly lower during the quarter ended June 2009 as compared to the corresponding period in year 2008. We
cannot assure you that a strike will not occur in the future or that it will be resolved on terms favourable to us. If
such a strike occurs, our business, financial condition and results of operations could be adversely affected.
24
In the United States, the film industry was significantly affected by a strike conducted by the United States‟ two
major writers‟ guilds between November 2007 and February 2008 as a result of the guilds‟ dispute with the Alliance
of Motion Picture and Television Producers. During and after this period, the production of certain films was
significantly disrupted or completely halted. As a result, the release dates of certain films were delayed, the
production of certain films and their final content were adversely affected and the financing arrangements regarding
certain films were disrupted or terminated. Such a strike could adversely affect the operations of our subsidiary
located in the United States, Lowry Digital, which provides various film and media services to American film
productions. We cannot assure you that a strike related to the American film industry will not occur in the future or
that such a strike will be resolved in a manner that does not adversely affect the operations of Lowry Digital. If such
a strike occurs, our business, financial condition and results of operations could be adversely affected.
39. If film distributors delay in providing us films or do not enter into agreements with us for the distribution of
their films, our business and results of operations could be adversely affected.
We rely on film distributors to supply the films that we exhibit at our cinema theatres. We cannot assure you that we
will be able to enter into agreements with all film distributors from whom we wish to source films or that film
distributors will supply us films under our agreements in a timely manner. As a result, we may be unable to exhibit
films in our cinema theatres as desired or expected. If film distributors delay in providing us their films or do not
enter into agreements with us for the distribution of their films, our business and results of operations could be
adversely affected.
40. We have no prior experience in establishing or operating studios.
We are in the process of establishing an approximately 200,000 square feet studio in Film City, Mumbai, comprising
of three studio buildings with eight sound stages with appropriate noise control and other features. A part of this
studio was completed in January 2011 and we expect to complete the remaining portion of the studio by December,
2013. While we have been operating one studio building with three sound stages since January, 2011, we have not in
the past established or operated studios. Our studios may be subject to various operational risks, such as unexpected
maintenance or technical problems, accidents, power interruptions or equipment failures. Due to our lack of
experience in operating studios, we may be unable to prevent or address such risks appropriately. Further, any studio
that we establish and operate may not perform as expected. Any failure to successfully operate studios may
adversely affect our business, financial condition and results of operations.
41. We operate our theatrical exhibition and film and media services businesses in India and overseas, which
entails certain risks.
We operate our theatrical exhibition and film and media services businesses in several foreign jurisdictions in
addition to India. As of January 31, 2013, we operated our theatrical exhibition business in India and the United
States, with 258 screens in India and an additional 194 screens overseas. In addition, we operate our film post
production services through production laboratory in Mumbai and our creative services through facilities in
Burbank, London and Navi Mumbai. As we operate in various jurisdictions around the world, we are subject to
laws, rules and regulations in the jurisdictions in which we operate our theatrical exhibition and film and media
services businesses. The laws, rules and regulations applicable in these jurisdictions generally vary from each other
and we may be required to obtain additional certifications or approval in certain jurisdictions. We may also be
required to make changes to the manner in which we conduct our operations to comply with the applicable laws in
these jurisdictions. In the event that we are unable to comply with the requirements under the applicable laws, rules
or regulations of the jurisdictions in which we operate, we may face actions and claims against us. This may have
adverse effect our business, results of operations and financial conditions. Further, any failure to manage our
overseas business operations effectively or balance our management‟s attention and resources between our Indian
and overseas business operations may adversely affect our business, financial condition and results of operations.
42. We face certain risks related to our handling of inflammable materials, including film rolls.
25
We work with certain inflammable materials in the course of our business, including film rolls. Despite compliance
with requisite industry safety standards, our operations are subject to hazards associated with the handling of these
inflammable materials. If improperly handled or subjected to unsuitable conditions, these materials could be
destroyed and may also cause damage to our properties. The loss of such materials due to fire could cause us to fail
to deliver certain film materials in a timely manner, or at all, which could adversely affect our business, financial
condition and results of operations.
43. Some viewers or civil society organisations may find the film or television content we exhibit or produce to be
objectionable.
It is possible that some viewers in India or overseas may object to certain film or television content exhibited or
produced by us based on religious, political, ideological or any other positions held by such viewers. This is
particularly possible with regard to content that is graphic in nature, including violent or romantic scenes and films
that are politically oriented or targeted at a particular segment of the public. Viewers or civil society organisations,
including interest groups, political parties, religious or other organisations may assert legal claims, seek to ban the
exhibition of film at our cinema theatres or television content, protest against us or films in our cinema theatres or
television programs, damage our facilities, disrupt our operations or object in a variety of other ways. The
occurrence of any of these risks could damage our reputation and have an adverse effect on our business, prospects,
financial condition and results of operations. The films exhibited by us and television content that we produce could
result in claims being asserted, prosecuted or threatened against us based on a variety of grounds, including, among
others, defamation, hurting religious sentiments, invasion of privacy, negligence, obscenity or facilitating illegal
activities, any of which could have an adverse effect on our business, financial condition and results of operations.
44. Our liabilities may not be fully covered by insurance policies, which may expose us to substantial costs that
could adversely affect our business, financial condition and results of operations.
We maintain insurance for each of our properties which we believe is typical in our industry and in amounts which
we believe are commercially appropriate for a variety of risks, including for losses incurred due to terrorism, fire,
flood, earthquake allied perils and burglary and loss of profit due to fire in our cinema theatres. Additionally, we
maintain insurance related to commercial general liability, cash and equipment in transit as well as coverage for
various items of equipment. However, such insurance may not be adequate to cover all losses or liabilities that may
arise from our operations, particularly when the loss suffered is not easily quantifiable. Even if we have availed of
adequate insurance cover, we may not be able to successfully assert our claims for any liability or loss under the
relevant insurance policies. Additionally, there may be various other risks or losses for which we are not insured
either because such risks are uninsurable or not insurable on commercially acceptable terms. For example, we do not
carry insurance for certain types of losses, such as those due to war. We also do not maintain a key man insurance
policy. Should an uninsured loss occur, we could incur substantial losses. In addition, even if any such loss is
insured, we may be required to pay a significant deductible on any claim for recovery of such a loss prior to our
insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed the limit of our coverage.
Further, if an accident resulting in personal injury to a patron or other third party at one of our cinema theatres
occurs, even if we hold sufficient insurance cover for the liability, our reputation may be adversely affected. If an
uninsured loss or a loss in excess of an insured limit occurs, our business, financial condition and results of
operations may be adversely affected. Furthermore, we cannot assure you that in the future we will be able to
maintain insurance of the types or at levels which we deem necessary or adequate.
45. Restrictions on ticket prices imposed in certain states of India may adversely affect our results of operations.
Cinema theatres in the states of Delhi, Punjab, Haryana Tamil Nadu and Andhra Pradesh are subject to regulations
under which the ticket prices are required to be approved by the licensing authority, and such prices may be
increased only with the prior sanction of the licensing authority. In Tamil Nadu and Andhra Pradesh, the minimum
and maximum ticket prices are determined based on facilities in the respective cinema theatres. Further, in Tamil
Nadu, we are required to reserve 10.00% of the total approved seating capacity of the cinema theatres for the lowest
26
class depending on the location of the cinema theatres. For the Fiscal 2011 and for Fiscal 2012, cinema theatres in
the states of Delhi, Punjab, Haryana, Tamil Nadu and Andhra Pradesh accounted for 18% and 24% of our total
theatrical exhibition revenues. As of January 31, 2013, 25 of the 97 cinema theatres operated by us in India are
located in these states, representing 58 out of a total of 258 screens in India (including food courts). In the event
these restrictions prevent us from increasing the ticket prices as may be required by us, it may affect the results of
our operations.
46. We face competition from other forms of media and entertainment.
We compete for the public's leisure time and disposable income with other forms of entertainment, including, among
others, sporting events, concerts, live theatre and restaurants. The theatrical exhibition industry also faces
competition from other forms of out-of-home entertainment, such as concerts, amusement parks and from other
forms of in-home entertainment. We also face competition from other forms of media such as radio, cable television,
newspapers, and magazines. These alternate forms of entertainment compete with the theatrical exhibition of films
to capture the discretionary spending of the patrons and advertisement revenues.
47. We have not entered into definitive agreements to use the Net Proceeds of the Issue.
We intend to use the Net Proceeds of the Issue for (i) prepayment/ repayment of our loans availed from our various
entities including our Promoters and (ii) general corporate purposes, as described in the chapter entitled “Objects of
the Issue” at page 84.
Pending utilization of the Issue Proceeds as described in this Draft Letter of Offer, we intend to temporarily invest
the funds in high quality interest bearing liquid instruments, including deposits with banks and investments in
money market mutual funds and other financial products and investment grade interest bearing securities. Such
investments would be in accordance with the investment policies or investment limits approved by our Board of
Directors from time to time. Our management will have the discretion to revise our business plan from time to time
and consequently our funding requirement and deployment of funds may also change.
Further, as the Issue size is more than `50,000 lakhs, a monitoring agency must be appointed. We will appoint a
monitoring agency prior to filing of the Letter of Offer.
48. The objects of the Issue include the utilization of the proceeds of the Issue to repay existing loans from one
of our Company’s Promoter.
Our Company intends to use a portion of the Net Proceeds to discharge some of the existing loans availed by our
Company from Reliance Capital Limited, one of our Company‟s Promoter. To the extent that portion of the existing
loans are adjusted as share application money, our Company will not receive fresh funds.
Additionally, if the Company‟s other Equity Shareholders do not subscribe to the Issue the proportionate share of
equity held by the Company‟s Promoters will increase. This will dilute the relative interest of the Company‟s other
Equity Shareholders. For further details, please see the chapter entitled “Objects of the Issue” at page 84.
49. There are outstanding litigations involving our Company, our Subsidiaries, our Joint ventures, our
Directors, one of our Promoters and the Group Companies
There are various litigations outstanding involving our Company, our Subsidiaries, our Joint Ventures, our
Directors, one of our Promoters and our Group Companies. These legal proceedings are pending at different levels
of adjudication before various courts, enquiry officers and tribunals. The amounts claimed in these proceedings have
been disclosed to the extent ascertainable and quantifiable and include amounts claimed jointly and severally from
our Company and other parties. Should any new developments arise, such as any change in applicable Indian law or
any rulings against our Company by appellate courts or tribunals, our Company may need to make provisions in its
27
financial statements that could increase expenses and current liabilities. Any adverse decision may have an adverse
effect on our Company‟s business, results of operations and financial condition. The brief details of such
outstanding litigation as of the date of this Draft Letter of Offer are as follows:
Litigation against our Company
Sr.
No.
Nature of litigation Number of outstanding
cases
Aggregate approximate amount involved
(` in lakhs)*
1. Criminal 1 NA
2. Civil 28 481.52
3. Arbitration 2 7,859.97
4. Tax 30 7,329.73
5. Labour 6 14.53
6. Consumer 22 15.95 *Litigation that is not quantifiable is represented as NA
Litigation against our Subsidiaries and Joint Ventures
Sr.
No.
Name of
Subsidiary/Joint
Venture
Nature of litigation Number of
outstanding
cases
Aggregate
approximate
amount involved
(in lakhs)*
` equivalent of the
amount involved
calculated as on
December 31, 2012
(in lakhs)
1. Reliance
MediaWorks
Entertainment
Services Limited
Tax 2 `536.88
2. Reliance
MediaWorks
Theatres Limited
Civil 2 `1.50
3. Reliance
MediaWorks (UK)
Civil 1 £0.011 0.89
4. Swanston
Multiplex
Cinemas Private
Limited
Criminal 3 `0.21
5. Swanston
Multiplex
Cinemas Private
Limited
Labour 1 NA
6. Swanston
Multiplex
Cinemas Private
Limited
Tax Notices 3 207.19
*Litigation that is not quantifiable is represented as NA
1 The exchange rate used for conversion is 1£ = ` 88.51 as at December 31, 2012
Litigation against our Directors
Sr.
No.
Name of Director Nature of litigation Number of
outstanding cases
Aggregate approximate
amount involved (in `
lakhs)*
28
Sr.
No.
Name of Director Nature of litigation Number of
outstanding cases
Aggregate approximate
amount involved (in `
lakhs)*
1. Gautam Doshi Criminal 1 NA
2. Sujal Shah Civil 1 ` 2,800.00 *Litigation that is not quantifiable is represented as NA
Litigation against our Promoter
Sr.
No.
Name of Promoter Nature of litigation Number of
outstanding cases
Aggregate approximate
amount involved
(` in lakhs)*
1. Reliance Capital Limited Criminal 34 NA
2. Reliance Capital Limited Civil 2 921.50
3. Reliance Capital Limited Investor Related
Disputes (monetary)
243 9.42
4. Reliance Capital Limited Consumer 234 1,074.24 *Litigation that is not quantifiable is represented as NA
Litigation against our Group Companies
Sr.
No.
Name of Group
Company
Nature of litigation Number of
outstanding cases
Aggregate approximate
amount involved
(` in lakhs)*
1. Reliance Broadcast
Network Limited
Civil 9 205.97
2. Reliance Broadcast
Network Limited
Tax 2 70.57
3. Reliance Broadcast
Network Limited
Labour 5 31.29
4. Reliance Broadcast
Network Limited
Stamp Duty 1 8.19
5. Reliance Broadcast
Network Limited
Notices 5 1,421
6. Reliance Capital Asset
Management Limited
Civil 19 152.4
7. Reliance Capital Asset
Management Limited
Consumer 26 170.00
8. Reliance General
Insurance Company
Limited
Civil 1 14.33
9. Reliance General
Insurance Company
Limited
Consumer 7,166 6225.76
10. Reliance General
Insurance Company
Limited
Insurance claims 25,056 25,413.69
11. Reliance Securities
Limited
Civil 5 1,924.42
12. Reliance Securities
Limited
Consumer 7 43.33
13. Reliance Securities Labour 1 NA
29
Sr.
No.
Name of Group
Company
Nature of litigation Number of
outstanding cases
Aggregate approximate
amount involved
(` in lakhs)*
Limited
14. Reliance Money Express
Limited
Civil 1 1.03
15. Reliance Life Insurance
Company Limited
Criminal 76 NA
16. Reliance Life Insurance
Company Limited
Civil 89 444.74
17. Reliance Life Insurance
Company Limited
Arbitration 1 2,109.37
18. Reliance Life Insurance
Company Limited
Tax 4 866.51
19. Reliance Life Insurance
Company Limited
Labour 9 NA
20. Reliance Life Insurance
Company Limited
Consumer 609 1,682.20
21. Reliance Life Insurance
Company Limited
Insurance claims 4,362 NA
22. Reliance Life Insurance
Company Limited
Notices 724 NA
23. Reliance Home Finance
Limited
Consumer 1 0.94
24. Indian Commodity
Exchange Limited
Civil 1 NA
25. Reliance Exchangenext
Limited
Civil 1 NA
*Litigation that is not quantifiable is represented as NA
For further details, please see the chapter entitled “Outstanding Litigation and Material Developments” at page 312.
Action taken by SEBI against Promoter Group / Group Companies in the past:
Sl. No. Name of Promoter Group / Group
company
Action taken by SEBI
1. Reliance Securities Limited Two show cause notices were issued by SEBI to
Reliance Securities Limited (RSL) on August 9, 2010
and August 31, 2010, alleging violation of the
provisions of the SEBI (Stock Brokers and Sub-
brokers) Regulations, 1992 in respect of certain
irregularities in operations. RSL, subsequently,
approached SEBI under the SEBI guidelines for
Consent Orders without admitting to, or denying, guilt.
The terms of consent were accepted by SEBI. The
accepted terms of consent were issued in the form of a
Consent Order on June 9, 2011. According to the
terms of the Consent Order, amongst other things, RSL
was directed to pay `25,00,000 as settlement charges
for settlement of the matter. Pursuant to the said
Consent Order, Reliance Securities Limited paid
`25,00,000 and the said proceedings stand disposed
off.
30
2. Reliance Equities International Private
Limited
SEBI conducted an inspection of books and records of
Reliance Equities International Private Limited
(REIPL) for the period April 1, 2008 to March 31,
2009. REIPL had submitted its responses on various
findings / comments of SEBI. Subsequently, SEBI by
its letter date August 31, 2010 directed REIPL to
rectify certain defects which it had failed to rectify.
REIPL submitted its response to SEBI on September
24, 2010 confirming the corrective steps taken.
3. Reliance Share & Stock Brokers Private Limited SEBI, vide order dated December 11, 2006 had
suspended Reliance Share & Stock Brokers Private
Limited‟s (RSSBPL) registration as stock broker for a
period of 4 (four) months. Thereafter, RSSBPL filed
an appeal No. 151 of 2006 with Securities Appellate
Tribunal (SAT) challenging SEBI‟s order. Meanwhile,
SEBI through its letter dated November 30, 2007 has
agreed to the consent terms proposed by RSSBPL of
settling the matter, among other things, by payment of
`50,00,000. However, the payment under the
abovementioned letter from SEBI was subject to
approval of consent terms by SAT.
SEBI vide order no. EFD / DRAIII / VRP / SS /
109671 / 2007 dated November 30, 2007 has accepted
RSSBPL consent application for a consent order
towards settlement of the dispute with them. The
dispute was settled without admitting or denying the
guilt under the consent terms proposed by RSSBPL
and as approved by the independent high power
advisory committee (HPAC) of SEBI.
4. Reliance Capital Limited SEBI had issued a letter (no. MIRSD-
4/DP/INSP/OW/10677/2010) dated July 1, 2010 to
Reliance Capital in respect of certain irregularities /
deficiencies in its depository operations.
Reliance Capital has submitted the detailed reply vide
letter dated July 20, 2010 confirming the corrective
steps taken.
5. Reliance Capital Asset Management Limited SEBI on June 3, 2009 directed Reliance Capital Asset
Management Limited to withdraw one particular
advertisement pertaining to the NFO of Reliance
Infrastructure Fund of Reliance Mutual Fund for non
compliance with regulation 30(1) of Securities and
Exchange Board of India (Mutual Funds) Regulations,
1996.
SEBI vide order dated January 12, 2010 disposed off
the proceedings and directed Reliance Capital Asset
Management Limited to abide by the aforesaid
regulations.
SEBI had imposed a fine of ` 6,00,000 on Reliance
Mutual Fund in March 2003 for breach of investment
31
restrictions which was duly paid.
IRDA Penalties
Except as provided in the table below, there has been no penalty imposed by the IRDA against any entity belonging
to the Promoter Group or forming part of Group Companies.
Sl. No. Name of Promoter Group
/ Group company
Details Paid on Penalty imposed
1. Reliance General Insurance
Company Limited
Co-insurer – Breach by
lender
May 29, 2006 1,000
Co-insurer – Breach by
lender
August 28, 2006 1,000
Co-insurer- Breach by
lender
August 28, 2006 1,000
Predatory Pricing December 5, 2006 50,00,000
Breach of File & Use
Guidelines (Health wise
policy)
July 28, 2009 20,00,000
2. Reliance Life Insurance
Company Limited
Payment of excess referral
fees than envisaged in the
referral guidelines and
deviation in the File & Use
procedure particularly in
group products in violation
of circular IRDA/Cir. No.
01/IRDA/ACTL/MC/2006-
07 dated 12/7/2006
August 12, 2010 10,00,000
For further details, please see the chapter entitled “Other Regulatory and Statutory Discolosures” at page 340.
50. Some of our Group Companies have incurred losses.
As set forth below, some of our Group Companies have incurred losses (as per their unconsolidated financial
statements). (` in lakhs)
Sr. No. Name of the Group Company Profit / Loss
after tax for
the financial
year 2010
Profit / Loss
after tax for
the financial
year 2011
Profit / Loss
after tax for
the financial
year 2012
1. Adhar Project Management & Consultancy Private Limited 0.13 10.84 (0.54)
2. Indian Commodity Exchange Limited (554.00) (3,122.00) (2,556.00)
3. QOPPA Trading Private Limited(2) NA (2.20) (3.39)
4. Reliance Alternative Investments Services Private Limited 1.11 4.19 (2.84)
5. Reliance Asset Management (Malaysia) Sdn. Bhd. a (3) (452.23) (912.81) (1,038.90)
32
Sr. No. Name of the Group Company Profit / Loss
after tax for
the financial
year 2010
Profit / Loss
after tax for
the financial
year 2011
Profit / Loss
after tax for
the financial
year 2012
6. Reliance Asset Management (Singapore) Pte Limited b (150.67) (732.10) (1,519.09)
7. Reliance Capital (Singapore) Pte. Limited b (0.06) (5.68) (9.17)
8. Reliance Capital Asset Management (UK) Plc. c (448.33) (623.16) (603.75)
9. Reliance Composite Insurance Broking Limited 96.63 605.79 (226.36)
10. Reliance Exchangenext Limited (20.57) (108.58) (146.94)
11. Reliance General Insurance Company Limited (5,042.70) (31,160.17) (34,319.93)
12. Reliance Investment Banking Services Limited 4.23 (4.03) (0.45)
13. Reliance Money Precious Metals Private Limited (formerly
Reliance Capital Research Private Limited)
(2.12) (0.16) (0.16)
14. Reliance Share & Stock Brokers Private Limited (164.57) (133.13) (121.05)
15. Reliance Spot Exchange Infrastructure Limited (442.41) (648.47) (550.98)
16. Reliance Venture Asset Management Private Limited 111.90 (215.23) (106.46)
17. Reliance Wealth Management Limited(4) (2.88) (93.78) (286.60)
18. Viscount Management Services Limited (7,400.29) (7,144.15) (7,996.66)
19. Indian Agri Services Private Limited NA NA (6.60)
(1) N.A. indicates profit during that financial year.
(2) QOPPA Trading Private Limited was incorporated on February 28, 2011.
(3) Reliance Asset Management (Malaysia) Sdn. Bhd. was incorporated on February 20, 2009.
(4) Reliance Wealth Management Limited was incorporated on January 1, 2009.
a Losses in RM. The average exchange rate for the year ended March 31, 2010, March 31, 2011 & March 31, 2012,
used for conversion are RM1=` 13.69, 14.47 and 15.62, respectively. b Losses in SGD. The average exchange rate for the year ended March 31, 2010, March 31, 2011 & March 31, 2012
used for conversion is SG$ 1 = ` 33.25, 34.21 & 38.15, respectively. c Losses in Pound. The average exchange rate for the year ended March 31, 2010, March 31, 2011 & March 31, 2012,
used for conversion is £1= ` 75.72, 70.87 & 76.44, respectively.
Further, our listed Group Company has also suffered losses (as per their unconsolidated financial
statements): (` in lakhs)
33
Name of the Group Company Loss After Tax
for the financial
year 2010(1)
Loss After Tax
for six months
ended September
30, 2010(1)
Loss After Tax
for six months
ended March
31, 2011(2)
Loss After
Tax
for 12
months
ended March
31, 2012
Loss After
Tax for six
months
ended
September
30, 2012(3)
Reliance Broadcast Network
Limited
(7,612.67) (2,491.73) (1,149.68) (1,952.53) (2,670.15)
(1) Pursuant to the board resolution dated October 21, 2010, Reliance Broadcast Network Limited closed its books of accounts as of
September 30, 2010 and accordingly the financial year was of six months ending September 30, 2010.
(2) Pursuant to the board resolution dated May 5, 2011, Reliance Broadcast Network Limited closed its books of accounts as of March
31, 2011 and accordingly the financial year was of six months ending March 31, 2011.
(3) Based on unaudited financials subject to limited review
For details, please see the chapter entitled “Our Group Companies” at page 233 of this Draft Letter of Offer.
51. We have experienced negative cash flows during previous fiscals and any negative cash flows in the future
could adversely affect our financial condition and the trading price of our Equity Shares.
We experienced negative cash flows during previous fiscals as set forth in the tables below:
Standalone: (` in lakhs)
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2008
Net cash generated
from/(used in)
Operating Activities
(510.48) NA NA (13,864.35) (2,979.64)
Net cash generated
from / (used in)
investing activities
(15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)
Net cash flow (used in)
/ generated from
financing activities
NA NA NA NA NA
Only negative cash flows have been disclosed. Positive cash flow during any fiscal has been indicated as “NA”.
Consolidated: (` in lakhs)
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2008
Net cash generated
from/(used in)
Operating
Activities
(8,288.22) (5,216.62) NA NA NA
Net cash generated
from / (used in)
investing activities
(3,161.67) NA (46,562.73) (23,791.91) (65,782.53)
Net cash flow (used
in) / generated from
financing activities
NA NA NA NA NA
Only negative cash flows have been disclosed. Positive cash flow during any fiscal has been indicated as “NA”.
Any negative cash flows in the future could adversely affect our financial condition and the trading price of the
Equity Shares.
34
52. We have entered into, and may, in future, enter into, related party transactions.
We have entered into, and may in the future enter into, certain transactions with our Promoters and Group
Companies, including companies engaged in our line of business or in related areas. These transactions were
primarily made in the ordinary course of business at arm‟s length. It is likely that we will continue to enter into
further related party transactions in the future. For details of the related party transactions, please see the chapter
entitled “Financial Statements” at page F1.
53. We may raise additional equity capital which may dilute your existing shareholding.
Our growth and business strategies may require us to raise additional capital. We may raise such additional capital
through a further issue of securities. Our Company‟s shareholders have at the annual general meeting held on
December 24, 2012 approved a qualified institutions placement (“QIP”) of equity shares or instruments that are
convertible into or exchangeable with equity shares, in one or more tranches, upto an aggregate amount not
exceeding `50,000 lakhs, which as per Regulation 89 of the SEBI (ICDR) Regulations, can happen only once our
networth becomes substantially positive, as the aggregate amount of the QIP cannot exceed five times of our
networth as per the audited balance sheet of the previous financial year. Any issuance of Equity Shares to persons
other than the Equity Shareholders will dilute your existing equity shareholding. Further, we may obtain a funding
from our Promoters through an equity infusion. This will also dilute your shareholding.
External Risk Factors
54. The Indian film exhibition sector is highly regulated and changes in regulations may have an adverse effect
on our business.
The Indian film exhibition sector is highly regulated by both the central and the state governments. These
regulations and policies are exhaustive and apply to all aspects of building and safety requirements, specify
preconditions to be met for licensing requirements, show tax and entertainment tax registrations and the pre-
conditions for grant of exemptions from the payment of entertainment tax. These regulations and policies have an
impact on our ability to operate cinemas and the viability of our cinemas in different states. Changes in these
regulations may have an adverse effect on our business and may render our business unviable by increasing
compliance requirements and compliance costs.
55. The transition to IFRS converged Indian Accounting Standards in India is still unclear and we may be
negatively impacted by such transition.
The Ministry of Corporate Affairs, Government of India, has recently notified that the IFRS converged Indian
Accounting Standards (“IND AS”) will be implemented in a phased manner. It was also mentioned that the date of
implementation of IND AS will be notified by the MCA at a later date and such date is yet to be notified.
Additionally, IND AS has fundamental differences with IFRS and hence financial statements prepared under IND
AS may be substantially different from financial statements prepared under IFRS. There can be no assurance that the
financial condition, results of operations, cash flow or changes in shareholder‟s equity of our Company will not
appear materially worse under IND AS than under Indian GAAP. As our Company adopts IND AS reporting, it may
encounter difficulties in the ongoing process of implementing and enhancing its management information systems.
Moreover, there is increasing competition for the small number of IFRS experienced accounting personnel available
once Indian companies begin to prepare IND AS financial statements. There can be no assurance that the adoption
of IND AS by our Company will not adversely affect its reported results of operations or financial condition and any
failure to successfully adopt IND AS in accordance with the prescribed timelines could have a material adverse
effect on our financial position and results of operations.
56. Fluctuation of the Rupee against foreign currencies may have an adverse effect on our results of
operations.
35
While we report our financial results in Indian rupees, portions of our total income, expenses and investments are
denominated, generated or incurred in currencies other than Indian rupees. Such foreign currencies include the USD,
GBP, MYR and EUR. To the extent that our income, expenditures and investments are not denominated in Indian
rupees, exchange rate fluctuations may have an adverse effect on our results of operations and financial condition.
Further, our future capital expenditures and investments may be denominated in currencies other than Indian rupees.
Therefore, a decline in the value of the Indian rupee against such other currencies could increase the Indian rupee
cost of incurred on such expenditures and investments. The exchange rate between the Indian rupee and various
foreign currencies has varied substantially in recent years and may continue to fluctuate significantly in the future.
The consolidation of our overseas subsidiaries will also expose us to translation risks which may significantly
impact our results of operations and financial condition.
Risks Relating to India
57. Political instability or changes in the Government of India could adversely affect economic conditions in
India and consequently our business.
We are incorporated in India, derive a significant portion of our revenues from India and a significant portion of our
assets are located in India. Consequently, our performance and the market price and liquidity of the Equity Shares
may be affected by changes in exchange rates and controls, interest rates, Government policies, taxation, social and
ethnic instability and other political and economic developments affecting India. The Government has traditionally
exercised and continues to exercise significant influence over many aspects of the economy. Our business and the
market price and liquidity of the Equity Shares may be affected by interest rates, changes in Government policy,
taxation, social and civil unrest and political, economic or other developments in or affecting India. Since 1991,
successive governments have pursued policies of economic and financial sector liberalisation and deregulation and
encouraged infrastructure projects. The Government in recent years has announced policies and taken initiatives that
support the economic liberalisation programme pursued by previous governments. The Government may change
policies regarding the rate of economic liberalisation, banks and financial institutions and the film industry, foreign
investment and other matters affecting investment in the Equity Shares. A significant change in the Government's
policies in the future, in particular, those relating to the film industry in India, could affect business and economic
conditions in India, and could also adversely affect our financial condition and results of operations.
58. If communal disturbances, riots or terrorist attacks occur in India, or if regional hostilities increase, our
business, financial condition and results of operations may be adversely affected.
India has experienced communal disturbances, riots and terrorist attacks in recent years. If such events recur, our
operational and marketing activities may be adversely affected, resulting in a decline in our income. The Asian
region has, from time to time, experienced instances of civil unrest and hostilities among neighbouring countries.
Hostilities and tensions may occur in the future and on a wider scale. Military activity or terrorist attacks in India,
such as the attacks in Mumbai in November 2008, as well as other acts of violence or war could influence the Indian
economy by creating a perception that investments in India involve higher degrees of risk. Events of this nature in
the future, as well as social and civil unrest within other countries in Asia, could influence the Indian economy and
could have an adverse effect on the market for securities of Indian companies, including the Equity Shares.
59. A slowdown in the economic growth in India could adversely affect our business.
We derive most of our revenues from operations in India and consequently, our performance and growth is
dependent in large part on the state of the Indian economy. Any slowdown in the Indian economy, and in particular
in the discretionary spending habits of our customers, could adversely affect our business.
60. A downgrade of India’s sovereign debt rating may adversely affect our ability to raise additional debt
financing.
36
India's sovereign debt rating could be downgraded due to various factors, including changes in tax or fiscal policy,
which are outside our control. Such downgrading could cause a change in interest rates or other commercial terms
and could adversely affect our ability to raise additional financing as well as our capital expenditure plans, business
and financial performance. A decline in this reserve could affect the valuation of the Indian Rupee and could result
in reduced liquidity and higher interest rates, which could adversely affect the availability of financing to us.
61. Natural disasters that could severely disrupt the normal operation of our business.
Some of the countries in which we operate have, in the past, experienced natural disasters, such as tsunamis and
earthquakes. If any of our facilities were to be damaged by a natural disaster, our business operations could be
interrupted or delayed, which could adversely affect our business, financial condition and results of operations.
62. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could
adversely affect our business.
The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern, such as swine
influenza, could have a negative impact on the global economy, financial markets and business activities worldwide,
which could adversely affect our business. While we have not been adversely affected by such outbreaks in the past,
we cannot assure you that a future outbreak of an infectious disease among humans or animals or any other serious
public health concerns will not have an adverse effect on our business.
63. Our ability to raise foreign capital may be constrained by Indian law.
As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such
regulatory restrictions limit our financing sources for our operations and could constrain our ability to obtain
financing on favourable terms and refinance existing indebtedness. In addition, we cannot assure you that required
approvals will be granted to us without onerous conditions, or at all. Limitations on foreign debt may have an
adverse effect on our business, financial condition and results of operations.
64. Our business and activities are regulated by the Competition Act, 2002.
The Parliament has enacted the Competition Act, 2002, as amended, (“Competition Act”) for the purpose of
preventing practices having an adverse effect on competition in the relevant market in India under the auspices of
the Competition Commission of India (“CCI”). Under the Competition Act, any arrangement, understanding or
action whether or not formal or informal which causes or is likely to cause an appreciable adverse effect on
competition is void and attracts substantial penalties. Any agreement among competitors which directly or indirectly
involves determination of purchase or sale prices, limits or controls production, or shares the market by way of
geographical area or number of customers in the relevant market is presumed to have an appreciable adverse effect
on competition in the relevant market in India and shall be void. Further, the Competition Act prohibits abuse of
dominant position by any enterprise. If it is proved that the contravention committed by a company took place with
the consent or connivance or is attributable to any neglect on the part of, any director, manager, secretary or other
officer of such company, that person shall be guilty of the contravention and liable to be punished.
On March 4, 2011 the Government of India notified and brought into force the combination regulation (merger
control) provisions under the Competition Act with effect from June 1, 2011. The combination regulation provisions
require that acquisition of shares, voting rights, assets or control or mergers or amalgamations which cross the
prescribed asset and turnover based thresholds shall be mandatorily notified to and pre-approved by the CCI. In
addition, on May 11, 2011, the CCI issued the final Competition Commission of India (Procedure in regard to the
transaction of business relating to combinations) Regulations, 2011 which sets out the mechanism for
implementation of the combination regulation provisions under the Competition Act. It is unclear as to how the
Competition Act and the CCI will affect the business environment in India.
37
If we are adversely impacted, directly or indirectly, by any provision of the Competition Act, or its application or
interpretation, generally or specifically in relation to any merger, amalgamation or acquisition proposed by us, or
any enforcement proceedings initiated by the CCI, either suo moto or pursuant to any complaint, for alleged
violation of any provisions of the Competition Act it may have a material adverse effect on our business, financial
condition and results of operations.
Risks Relating to the Investment in the Equity Shares
65. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash
flows, working capital requirements, capital expenditures and other factors.
The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash
flows, working capital requirements, capital expenditures and other factors. There can be no assurance that we will
have distributable funds in future periods or that we will pay dividend even if we have distributable profits.
66. The price of our Equity Shares may be volatile.
The trading price of our Equity Shares may fluctuate after this Issue due to a variety of factors, including our results
of operations and the performance of our business, competitive conditions, general economic, political and social
factors, the performance of the Indian and global economy and significant developments in India‟s fiscal regime,
volatility in the Indian and global securities market, performance of our competitors, the Indian film industry and the
perception in the market about investments in the film industry, changes in the estimates of our performance or
recommendations by financial analysts and announcements by us or others regarding contracts, acquisitions,
strategic partnerships, joint ventures, or capital commitments. In addition, if the stock markets experience a loss of
investor confidence, the trading price of our Equity Shares could decline for reasons unrelated to our business,
financial condition or operating results. The trading price of our Equity Shares might also decline in reaction to
events that affect other companies in our industry even if these events do not directly affect us. Each of these factors,
among others, could adversely affect the price of our Equity Shares.
67. Any future issuance of Equity Shares by us or sales of the Equity Shares by any of our significant
shareholders may adversely affect the trading price of the Equity Shares.
Any future issuance of Equity Shares by us, such as a primary offering or pursuant to a preferential allotment, may
dilute your shareholding in us, adversely affect the trading price of our Equity Shares and could affect our ability to
raise capital through an issuance of our securities. In addition, any perception by investors that such issuances or
sales might occur could also affect the trading price of our Equity Shares.
Additionally, the disposal of Equity Shares by any of our significant shareholders or our promoters, any future
issuance of Equity Shares by us or the perception that such issuances or sales may occur may significantly affect the
trading price of the Equity Shares. We cannot assure you that we will not issue Equity Shares or that such
shareholders will not dispose of, pledge or encumber their Equity Shares in the future.
68. The movements in the price of the Equity Shares may be subject to restrictions from time to time, which may
adversely affect a shareholder’s ability to sell, or the price at which it can sell, Equity Shares at a particular
point in time.
We are subject to a daily circuit breaker imposed on listed companies by all stock exchanges in India which does not
allow transactions beyond certain volatility in the price of the Equity Shares. This circuit breaker operates
independently of the index-based market-wide circuit breakers generally imposed by SEBI on Indian stock
exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the historical volatility
in the price and trading volume of the Equity Shares. The stock exchanges are not required to inform us of the
percentage limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit
breaker would effectively limit the upward and downward movements in the price of the Equity Shares. As a result
38
of this circuit breaker, the ability of shareholders to sell the Equity Shares or the price at which shareholders may be
able to sell their Equity Shares may be adversely affected.
69. There is no guarantee that the Equity Shares will be listed on the Stock Exchanges in a timely manner or at
all, and any trading closures at the Stock Exchanges may adversely affect the trading price of our Equity
Shares.
In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant
to the Issue will not be granted until after the Equity Shares have been issued and allotted. Approval for listing and
trading will require all relevant documents authorising the issuing of Equity Shares to be submitted. There could be
a failure or delay in listing the Equity Shares on the Stock Exchanges. Any failure or delay in obtaining the approval
would restrict your ability to dispose of your Equity Shares.
70. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.
Capital gains arising from the sale of the Equity Shares are generally taxable in India. Currently, any gain realised
on the sale of our shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in
India if the securities transaction tax (“STT”) has been paid on the transaction. The STT will be levied on and
collected by an Indian stock exchange on which our shares are sold. Any gain realised on the sale of our shares held
for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and as a
result of which no STT has been paid, will be subject to capital gains tax in India. Further, any gain realised on the
sale of our shares held for a period of 12 months or less will be subject to capital gains tax in India. Capital gains
arising from the sale of our shares will be exempt from taxation in India in cases where an exemption is provided
under a treaty between India and the country of which the seller is a resident. Generally, Indian tax treaties do not
limit India‟s ability to impose tax on capital gains. For more information, please see the chapter entitled “Statement
of Tax Benefits” at page 143. However, capital gains on the sale of our Equity Shares purchased in the Issue by
residents of certain countries may not be taxable in India by virtue of the provisions contained in the taxation treaties
between India and such countries. As a result, residents of other countries may be liable for tax in India as well as in
their own jurisdictions on gains arising from a sale of Equity Shares.
71. You will not be able to sell immediately on the Stock Exchanges any of the Equity Shares you purchase in
the Issue.
The Equity Shares will be listed on the Stock Exchanges. Pursuant to Indian regulations, certain actions must be
completed before the Equity Shares can be listed and trading may commence. Investors‟ book entry, or “demat”,
accounts with depository participants in India are expected to be credited within two working days of the date on
which the basis of allotment is approved by the Stock Exchanges. Thereafter, upon receipt of final approval from the
Stock Exchanges, trading in the Equity Shares is expected to commence within seven working days of the date on
which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure that the Equity
Shares will be credited to investors‟ demat accounts, or that trading in the Equity Shares will commence, within the
time periods specified above.
Prominent notes
1. Issue of [●] Equity Shares for cash at a premium of ` [●] per Equity Share for an amount not exceeding
`60,000 lakhs on a rights basis to the existing Equity Shareholders of our Company in the ratio of [●]
Equity Share(s) for every [●] fully paid-up Equity Share(s) held by the existing Equity Shareholders on the
record date, that is on [●]. The Issue Price is [●] times the face value of the Equity Shares.
2. Our net worth as at September 30, 2012 was ` (58,149.80) lakhs on a consolidated basis as per our restated
consolidated financial statements prepared under Indian GAAP.
3. There has been no financing arrangement whereby our Promoter Group, directors of our Promoters, our
39
Directors and their relatives have financed the purchase by any other person of securities of our Company
other than in normal course of the business of the financing entity during the period of six months
immediately preceding the date of filing of this Draft Letter of Offer.
4. Set out below are the related party transactions entered into by us.
(` in lakhs)
Sr.
No.
Particulars Transaction
Amount
Transaction
Amount
Transaction
Amount
Transaction
Amount
Transaction
Amount
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2008
1 Holding
Companies - - - - 546.38
2 Significant
Shareholders,
key managerial
personnel and
their relatives 35.80 10.80 17.80 7.80 179.70
3 Fellow
Subsidiaries - - - - -
4 Enterprises over
which Company
has significant
influence /
associates (23.30) 15.80 262.90 414.37 753.51
5 Enterprises over
which Key
Managerial
personnel have
significant
influence - - - - -
6 Other related
parties - - - - -
For further details about our related party transactions, please see the chapter entitled “Financial
Statements” at page F1.
5. Details of the transaction between our Company and our Group Companies and between our Company and
our Subsidiaries during the last year, along with the nature of transactions and the cumulative value of such
transactions are set out below:
40
Sr.
No. Name of the Party Amount (` in lakhs) Nature of transaction
1. Reliance General Insurance Company
Limited 201.02 Insurance
2. Reliance Equity Advisors Limited 0.31 Theatrical exhibition business revenue
3. Reliance Life Insurance Company
Limited 89.77 Theatrical exhibition business revenue
4. Reliance Broadcast Network Limited 198.95 Theatrical exhibition business revenue
Total 490.05
6. Investors may contact the Lead Manager for complaints, information or clarifications pertaining to the
Issue.
41
SECTION III: INTRODUCTION
SUMMARY OF INDUSTRY
The following is a summary of the industry overview. This summary should be read in conjunction with, and is
qualified in its entirety by, more detailed information in the chapter entitled “Industry Overview” at page 152.
We have relied on websites and publicly available documents from various sources. The data may have been re-
classified by us for the purpose of presentation. Neither we nor any other person connected with the Offer has
independently verified the information provided in this chapter. Industry sources and publications, referred to in this
section, generally state that the information contained therein has been obtained from sources generally believed to
be reliable but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability
cannot be assured, and, accordingly, investment decisions should not be based on such information.
Overview of the Indian Economy
India is one of the fastest growing economies in the world with a rapidly expanding entertainment and media
(“E&M”) industry.
According to the Ministry of Statistics and Programme Implementation‟s (MOSPI) revised estimates, India‟s real
GDP registered a lower growth of 6.9% during Fiscal 2012, as compared with 8.4% in Fiscal 2011, largely
attributable to global factors include in particular, the crisis in the euro zone area and near recessionary conditions
prevailing in Europe, slow growth in many other industrialized countries, increase in crude price rate, etc. However,
relative to many other economies in the world, growth of 6.9 per cent in India is among the highest.
The following table illustrates India's real GDP growth between financial years 2009 and 2012 (at factor cost at
constant 2004-05 prices):
Fiscal 2009 Fiscal 2010 Fiscal 2011 Fiscal 2012
Real GDP Growth Rate (%) 6.7% 8.4% 8.4% 6.9% Source: Ministry of Statistics and Programme Implementation
Overview of the Indian Entertainment and Media Industry
The Indian E&M industry (primarily comprised, among others, of film, television, print media, animation and visual
effects VFX, radio and music) has witnessed steady growth in recent years and is estimated to have reached
`72,80,000 lakhs in 2011. The Indian E&M industry is projected to grow at a compound annual growth rate
(“CAGR”) of 14.90% from the year 2011 to the year 2016 to reach `1,45,70,000 lakhs. The Indian E&M industry
has grown at a CAGR of 9.09% between 2007 and 2011. (Source: Federation of Indian Chambers of Commerce and
Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The following factors are expected to contribute to further growth of the Indian E&M industry:
the continued growth and development of the Indian economy;
favourable demographic characteristics and trends in India;
the cultural diversity of the Indian population;
the internationalisation of the Indian E&M industry;
the availability of popular content; and
digitisation of content.
The following table provides the expected sizes and growth rates of the various segments of the Indian E&M
industry for the years 2011 through 2016:
42
(` lakhs)
E&M
Industry
Segment 2011 2012P 2013P 2014P 2015P 2016P
CAGR
(2011 to
2016)
T.V.
32,90,000
38,00,000
43,50,000
51,40,000
61,80,000
73,50,000 17.00%
20,88,000
22,60,000
24,68,000
27,00,000
29,49,000
32,34,000 9.00%
Film
9,29,000
10,00,000
10,97,000
12,11,000
13,45,000
15,03,000 10.00%
Radio
1,15,000
1,30,000
1,60,000
2,00,000
2,40,000
2,95,000 21.00%
Music
90,000
1,00,000
1,13,000
1,31,000
1,54,000
1,82,000 15.00%
O.O.H.
1,78,000
1,95,000
2,15,000
2,36,000
2,60,000
2,90,000 10.00%
Animation
3,10,000
3,63,000
4,30,000
5,11,000
6,10,000
6,90,000 17.00%
Gaming
1,30,000
1,80,000
2,30,000
2,90,000
3,70,000
4,60,000 29.00%
Digital
Advertising
1,54,000
1,99,000
2,58,000
3,35,000
4,37,000
5,70,000 30.00%
Total
72,84,000
82,27,000
93,21,000
1,07,54,000
1,25,45,000
1,45,74,000 14.90% *P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry
Report 2012”)
43
SUMMARY OF BUSINESS
The following is a summary of our business. This summary should be read in conjunction with, and is qualified in
its entirety by, more detailed information in the chapter entitled “Business” at page 165.
Overview
We are one of India‟s leading entertainment and media (“E&M”) companies with a presence across several
businesses such as theatrical exhibition of films, film and media services and television content production and
distribution. Our headquarters are located in Mumbai and we have operations across 79 cities and towns in India and
internationally, in, the UK and the United States.
Our theatrical exhibition business is our largest source of revenue. We operate one of India‟s largest cinema chains,
under the brand „BIG Cinemas‟, with 258 screens in India and an additional 194 screens in the United States as of
January 31, 2013. During Fiscal 2012, BIG Cinemas catered to approximately 502 lakhs and 74 lakhs consumers in
India and overseas, respectively.
Our film and media services business comprising production services, post-production services and media and
creative services for films and television is our second largest source of revenue, which comprises:
Production services: We lease sound stages, shooting floors, standard and high definition multi-camera
equipment and other related equipment to television and film production companies.
Post-production services: We process and trade film negatives at our laboratory located in Film City,
Mumbai. Our 4K DI laboratory located in Film City, Mumbai undertakes quality enhancement of film and
television content through digital techniques.
Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to 3D
and CGI services through our wholly owned subsidiary, Reliance MediaWorks Entertainment Services
Limited. In addition, our wholly owned subsidiaries located in United States and UK, Reliance Lowry
Digital Imaging Services, Inc and Reliance MediaWorks (UK) Limited, respectively, are engaged in the
business of digital image correction, film restoration and film processing.
We operate our film post production services through our production laboratory in Mumbai and our creative services
through facilities in Burbank (United States), London (UK) and Navi Mumbai (India). Films processed at our
laboratory in Mumbai have won, among others, 14 national awards for cinematography and our Company‟s film
processing facilities have been certified by Kodak Imagecare, an internationally recognised quality certification
program, for each of the years beginning 2007. We were among four companies to receive the “Judges Award for
Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in 2010. In August 2011, our
Company received a patent for an innovation – “System and method for removing semi-transparent artifacts from
digital images caused by contaminants in the camera‟s optical path”. We won the Scientific and Technical Award,
2012 at the Academy of Motion Picture, Arts and Sciences in 2012, for the development of a unique and efficient
system for the reduction of noise and other artefacts, thereby providing high quality images required by the film
making process.
As a part of our long term growth strategy of asset creation, during the previous five years, we have established:
a business process outsourcing (BPO) facility at Navi Mumbai;
post-production facilities for television commercials and broadcast; and
a DI Lab.
44
Further, we have purchased broadcast and film cameras. We have also increased the number of screens we
operate. This has been achieved organically and has enhanced our reach in terms of exhibition business and
also enabled us to strengthen our capabilities in post-production services and creative services divisions.
We are also in the process of establishing approximately 2,00,000 square feet studio located in Film City,
Mumbai with facilities for shooting films, television shows and television commercials, which we believe
meets international standards. This studio aims to provide a one-stop solution for all production needs for
domestic and international clients. When completed, the studio is expected to have three studio buildings with
eight sound stages with appropriate noise control and other features. A part of the studio constituting one studio
building with three sound stages is in operation since January 2011. We expect to complete the remaining
portion of the studio by December 2013.
We are also engaged in the business of television content production through our subsidiary, Big Synergy
Media Limited, under the brand “BIG Synergy”, which primarily produces non-fiction programmes in addition
to adapting international programme formats for Indian viewers. We have produced shows such as Kaun
Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India‟s Got Talent, Aap Ki Kachehri -
Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.
For Fiscal 2012 and Fiscal 2011, our restated consolidated net loss after tax was ` 91,016.62 lakhs and `
32,816.99 lakhs, respectively. For Fiscal 2012 and Fiscal 2011, our consolidated total income was ` 125,486.90
lakhs and ` 85,026.20 lakhs, respectively.
Our Competitive Strengths
We believe the following are our key competitive strengths:
Strong reputation and brand in the E&M sector
We believe that we have established a strong reputation and brand in the E&M sector. We have rebranded our
theatrical exhibition and our television content production businesses as “BIG Cinemas” and “BIG Synergy”,
respectively. This rebranding was undertaken in order to create a single E&M brand, “BIG”.
We have received various awards for our theatrical exhibition business, including “Multiplex of the Year” for the
year 2012 at Star Retail Awards, “Best Cinema Chain” for the year 2012 ZEE ETC Business Awards, “Most
Admired Innovative Concept of the Year” at the Images Retail Awards 2010 for our Ciné Diner theatre exhibition
concept, “Most Admired Retailer of the Year: Entertainment” award at the India Retail Awards in 2009, the
“Exhibitor of the Year” award at the CineAsia 2008 awards and the “Retailer of the Year” in the „Entertainment &
Fun‟ category at the India Retail Summit in 2007. The Silent National Anthem campaign launched by Big Cinemas
has secured a silver lion in the PR Lions category and two bronze lions for Best Use of Broadcast in a Promotional
Campaign and Corporate Image & Information, Films categories in 2011.
BIG Synergy, under which we produce television content, has produced television shows such as Kaun Banega
Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India‟s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke
Sath and Sach Ka Saamna. Many of these shows have received high viewer ratings and received awards in various
categories.
Our Academy Award winner wholly owned subsidiary Lowry Digital, we believe is one of the leading digital image
correction and restoration facilities in the world. Lowry Digital‟s clients include industry leaders such as Walt
Disney Pictures and Television and Warner Bros. Entertainment Inc. Lowry Digital‟s facility has provided image
enhancement and restoration services to approximately 600 films as of January 31, 2013 and has worked on classics
such as Casablanca, Singin‟ in the Rain, Sunset Boulevard and a number of Walt Disney Pictures & Television
classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie the Pooh,
Beauty and the Beast and 101 Dalmatians.
45
We invested 30% in capital of Galloping Horse America LLC. Consequently, Galloping Horse America LLC has
been renamed Galloping Horse-Reliance LLC. Galloping Horse-Reliance LLC has acquired certain assets of Digital
Domain Media Group Inc (DDMG), an Academy Award-winning digital production studio in Hollywood. We
believe that this association strengthens our position substantially as a major service provider for Hollywood studios
as also demonstrates our quality and efficient workflow processes as well as strong brand repute.
We believe that our longstanding presence in the film processing business has made us one of the important
operators in the Hindi film category in addition to being a key operator in certain regional language films. Films
processed at our laboratory located in Mumbai have won, among others, 14 national awards for cinematography and
our film processing facilities have been certified by Kodak Imagecare, an internationally recognised quality
certification program, for each of the years beginning 2007.
We believe we have established a strong reputation and brand through the quality of our products and services
which have obtained industry recognition and customer satisfaction. We believe that our strong reputation and brand
differentiates us from our competitors.
Demonstrated ability to expand our operations both organically and inorganically
We have created a global E&M company that is capable of operating across the entire E&M business value chain.
Since the Reliance Group acquired control of our Company in the financial year 2006, we have grown and
diversified our business. Our revenues have grown from `36,296.74 lakhs in Fiscal 2008 to `1,25,486.90 lakhs in
Fiscal 2012. Currently, we have diversified service offering across several businesses, such as theatrical exhibition
of films, film and media services and television and content production and distribution.
Our theatrical exhibition business has expanded from 32 screens across five cities as of March 31, 2006 to 452
screens across more than 101 towns and cities in India and the United States as of January 31, 2013. The number of
customers our Big Cinemas brand catered to in India increased from 129 lakhs in Fiscal 2008 to 576 lakhs across
India and overseas in Fiscal 2012.
We have also demonstrated our ability to acquire companies located in India and overseas in order to consolidate
our position as a company that is capable of operating across the entire E&M business value chain. For example, we
acquired Rave Entertainment Private Limited (“Rave”), Synergy Communications Private Limited (now, Big
Synergy Media Limited), iLab and Lowry Digital between the financial years 2007 and 2010 and the assets and
brand “Digital Domain” belonging to DDMG, through Galloping Horse-Reliance LLC, an associate entity, in
financial year 2012. The acquisition of Rave helped us in establishing our footprint in the North Indian cinema
territories, while Synergy Communications Private Limited has facilitated our entry into the business of television
content production and Lowry, “Digital Domain” and iLab have helped us establish significant presence in the
North American and European markets, offering us new business opportunities in image processing and restoration,
2D to 3D conversion and VFX.
Presence across various E&M businesses and geographies
We believe we are a one-stop solution provider for film and television producers and distributors in India. We
provide the entire range of film services, including studio rental, equipment rental, DI post-production laboratory
services, VFX, stereoscopic conversion, film processing, digital cinema mastering and operating cinema theatres in
India and US. Our presence across various businesses in the E&M sector allows allow us to develop long-term
relationships as we are able to cross-sell our various services and offer solutions for the varying requirements of our
customers.
Our strategy is to create a single global E&M company that is capable of operating in geographically diverse
markets and catering to a variety of consumers. We have expanded our operations by acquiring theatrical exhibition
assets in US. We have also established a presence in the film post-production services business in the United States
46
and the UK through the acquisition of Lowry Digital and iLab, respectively. We believe that our multinational
presence makes us an attractive proposition for our customers.
Our technological capabilities
We have attempted to develop or acquire the latest technological capabilities across our business lines to ensure that
we remain competitive. In our film and media services business, we utilise various sophisticated technologies,
including digital camera technology capable of recording high-definition video, sync-sound enabled studio stages
and fibre optic cables for the distribution of films.
We utilise proprietary image processing technology to deliver superior picture elements and have developed a
unique technology, the “Lowry Process”, which is used to create high image quality for all outputs, including film,
broadcast television, advertisements, digital cinema, Blu-Ray Disc and internet video. Lowry Digital‟s services
include film restoration, emergency image repair, digital blow-ups and DI enhancements. Lowry Digital also offers
image enhancement tools which are used for the restoration and upgrade of damaged analogue film prints. We were
among four companies to receive “Judges Award for Creativity & Innovation” in post-production at the Hollywood
Post Alliance Awards in November 2010. In August 2011, our Company received a patent for the following
innovation – “System and method for removing semi-transparent artifacts from digital images caused by
contaminants in the camera‟s optical path”. Our Company was the first Indian company to be recognized in the
category of science and technology for the development of a unique and efficient system for the reduction of noise
and other artefacts which provide a high quality image required for the film making process at the Academy of
Motion Pictures, Arts & Science Awards 2012.
Our film processing laboratory, through its telecine scanners, enables us to capture the fine details of a filmed image.
We are capable of grading the film in an uncompressed 4K resolution, the highest available resolution for film
production.
We introduced the IMAX digital projection system in India in 2001, which has enabled us to take advantage of the
increasing number of IMAX and IMAX 3D releases.
The Reliance Group’s brand, experience and position in India and overseas
The Reliance Group is a diversified business group with a strong brand, level of experience and position in India and
overseas. The Reliance Group is headed by Anil Dhirubhai Ambani, one of India‟s leading entrepreneurs, who has
won several awards and was voted as the “Person of Year – 2008” by Light Readings for outstanding achievements
in the telecommunications industry and “Businessman of the Year” in a poll conducted by The Times of India in
2006. Reliance Communications Limited, one of India‟s leading wireless carriers, in terms of coverage and capacity,
and Reliance Capital Limited, one of the India‟s leading private sector financial services companies are part of the
Reliance Group. The Reliance Group also includes Reliance Power Limited, one of India‟s leading power
development companies. The Reliance Group has a large presence in the entertainment, communications and
infrastructure sectors and we derive significant benefits from our association with the group. For example, we are
able to derive benefits of synergy in approaching advertisers through our relationship with Reliance Broadcast
Network Limited, a group company which owns 92.7 Big FM, one of India's leading radio networks, and BIG
Street, an out-of-home media business. We believe that we will continue to benefit from the depth of experience of
the Reliance Group and our association with the Reliance Group significantly enhances our brand value.
Our Business Strategy
Our business strategy is to build upon our competitive strengths and business opportunities to continue to be a
leading E&M company. Our business strategy consists of the following principal elements:
Create lean front-end centers in overseas markets and substantial back-end delivery centres in India for film and
media services
47
Hollywood produces maximum number of high budget films with high expenditure on VFX and 3D conversions.
However, the cost of production in US is almost four times as compared to that in India (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2009”). We have
identified this opportunity and mapped the demand with supply. We have created strategic front-ends in the markets
of US (Burbank) and UK (London), complimented by back-end delivery centres in India, one of which is located in
a SEZ. The front-end centers in US and UK focus on business development and hence are lean on assets. We intend
to continue to focus on further enhancement of strategic front-end tie-ups as also further strengthen the force-to-
market (sales) teams backed by increasing back-end asset creation in India, where our main delivery centres are
located.
Continue to focus on increasing our revenue from film and media services through complementary services
We intend to expand our service offerings in line with technological developments and market demand. For
instance, we have extended our BPO offerings from restoration and content processing to VFX, 2D to 3D
conversion and CGI keeping in line with the emerging market trends. We commenced production services business
with equipment rental and have extended our service bouquet by building a state-of-the-art studio in Film City,
Mumbai, comprising of three studio buildings with eight sound stages, which we believe will significantly
strengthen our ability to provide film and media services. While a part of the studio constituting one studio building
with three sound stages is operational, we expect to complete the remaining portion of the studio by December 2013.
Opportunistically expand our theatrical exhibition business
The key elements of our growth strategy for our domestic theatrical exhibition business include the following:
Focussing on select metro and tier 1 cities which we believe could potentially have a higher consumption
pattern; and
Expanding in certain select locations to establish a footprint or to strengthen our presence in identified film
territories.
A retail centric approach, to enhance the profitability of our theatrical exhibition business
Our key focus in improving the profitability of our theatres is through increasing patronage and improving the
overall customer experience, which we believe will lead to greater spending by customers, allow us to command
greater premiums in our ticket prices and increase advertising revenues. We seek to achieve this through the
following:
Enhancing our understanding of our customer to enable us to customise our programme selection. Further, we
propose to introduce movie and time specific pricing to increase admits and, consequently, box office
collections;
Offering the customer a wider F&B choice and providing the customer greater access to F&B option in-theatre
i.e. within the precincts of the auditorium;
Augmenting our advertising sales by better utilising the available on-screen and off-screen space;
Delivering consistent customer experience, in line with our proposition of delivering an affordable luxury
experience to larger pool of customers, whilst keeping a tight control on costs; and
Exploring avenues for rent rationalisation, in the context of the changing market environment.
Grow our business through internal restructuring
48
We would continue to evaluate various opportunities for the growth of our business. In order to garner further
investments with an aim to raise fresh capital for the growth of our business, we are considering restructuring certain
of our business divisions i.e. film and media services business and exhibition business, including by transferring
them to our subsidiaries. We may also consider options for entering into technical and financial collaboration with
strategic partners either directly or through our subsidiaries. For further details, please see the chapter entitled
“History and Certain Corporate Matters” at page 189.
Continue to pursue strategic acquisitions and alliances
We have expanded our operations by identifying and carrying out strategic acquisitions / alliances. The goals that
we hope to achieve through such strategic acquisitions/alliances include:
the expansion and enhancement of our businesses with minimum cost – both capital & operational;
the benefit of technical and operational synergies; and
expansion of our geographical reach.
We intend to continue to evaluate such options even in the future.
49
SUMMARY FINANCIAL INFORMATION
Following is a summary of the financial information. This summary should be read in conjunction with, and is
qualified in its entirety by, more detailed information in the section entitled “Financial Statements” at page F1.
Consolidated Financial Information
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A Non-current assets
I Fixed assets
(i) Tangible assets 89,148.54 111,782.74 104,933.32 80,215.84 40,666.60
(ii) Intangible assets 8,895.80 8,804.20 6,034.60 3,249.60 18,251.60
(iii) Capital work-in-
progress 12,010.90 15,029.90 24,538.92 21,203.60 21,331.01
(iv) Intangible assets under
development 285.90 - 132.51 - -
II Goodwill on consolidation 5,145.32 8,819.42 8,728.62 4,202.56 2,746.76
III Non-current investments 553.34 1,092.99 1,272.41 1,161.72 6,991.37
IV Deferred tax assets (net) 14.31 2.60 2.20 18.70 64.40
V Long-term loans and
advances 23,642.50 29,324.98 27,141.64 24,792.10 29,293.35
VI Other non-current assets 62.00 389.30 277.42 59.41 43.75
139,758.61 175,246.13 173,061.64 134,903.53 119,388.84
B Current assets
I Current investments - 10.44 7,902.30 - 13,556.71
II Inventories 1,417.70 1,325.30 907.20 690.50 761.30
III
Trade receivables
18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
IV Cash and bank balances 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49
V Short-term loans and
advances 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
VI Other current assets 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96
46,293.94 53,482.14 79,667.62 68,885.16 67,888.57
Liabilities
C Non-current liabilities
I Long-term borrowings 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90
II Deferred tax liabilities
(net) - 516.39 63.39 66.59 192.03
III Other long-term liabilities 3,639.00 2,909.05 1,468.90 871.85 342.98
50
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
IV Long-term provisions 621.10 774.71 383.20 3,434.40 3,038.99
79,928.47 48,630.26 42,320.49 61,733.30 56,673.90
D Minority interest 1,074.08 1,347.88 1,736.58 3,006.58 1,621.78
E Current liabilities
I Short-term borrowings 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22
II Trade payables 18,967.70 12,935.97 11,088.28 8,287.62 9,003.83
III Other current liabilities 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62
IV Short-term provisions 200.90 215.99 165.91 230.40 1,826.01
163,199.80 176,089.69 172,880.96 89,832.56 61,198.68
F Net Worth (A+B-C-D-E) (58,149.80) 2,660.44 35,791.23 49,216.25 67,783.05
G Represented by
i) Share capital 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and surplus (net) (60,603.61) 354.13 33,484.92 46,909.94 65,476.74
H Net worth ( i+ ii ) (58,149.80) 2,660.44 35,791.23 49,216.25 67,783.05
51
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009
Period
2008
Revenue from operations 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94
Other income 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80
Total revenue 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74
Direct operational expenses 49,304.20 31,059.80 28,102.00 23,868.30 9,792.00
Employee benefits expense 31,712.30 20,979.80 13,179.30 10,147.60 2,605.10
Finance costs (including loss on
derivative contracts) (net) 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Depreciation, amortisation and
impairment expense 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Other expenses 65,209.31 34,672.96 25,317.05 20,056.90 7,914.65
Total expenses 207,312.71 117,453.26 88,044.99 80,062.41 33,370.61
(Loss) / profit before exceptional
items, tax and minority interest (81,825.81) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Exceptional items (8,181.50) - - - -
(Loss) / profit before tax and
minority interest (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
less - Provision for taxes
- Current tax 769.50 133.94 39.77 441.10 228.29
- Deferred tax (credit) / charge (492.59) 452.69 13.25 (69.44) 551.72
- Fringe benefit tax - - - 171.70 78.00
Net (loss) / profit after tax before
minority interest (90,284.22) (33,013.69) (13,334.11) (7,485.53) 2,068.12
Less: (Loss) / profit transferred to
Minority interest 732.40 (196.70) (530.87) (322.12) 53.80
Net (loss) / profit after tax before
adjustment pursuant to Schemes (91,016.62) (32,816.99) (12,803.24) (7,163.41) 2,014.32
Add: Adjustment pursuant to
Modified Composite Scheme of
Amalgamation and Arrangement - - - - 84.20
Less: Adjustment pursuant to
Scheme of Amalgamation of Katch
22 - - - - (100.00)
Less: Adjustment pursuant to
Scheme of Arrangement for
demerger of Radio business/ Scheme - - - (649.30) -
52
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009
Period
2008
of Amalgamation
Net (loss) / profit after tax (91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
53
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
A
Cash flow from operating
activities
Net (loss) / profit before tax,
as restated (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Adjustment for
Depreciation, amortisation
and impairment expense 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Bad debts / Advances written
off 1,010.40 201.20 152.10 348.40 391.00
Sundry balances written-off 981.50 - - - -
Provisions written back
- (241.70) - -
Capital work in progress
written off 4,424.60 - - - -
Provision for doubtful debts
and advances 4,767.92 1,666.30 121.90 - 3.20
Dividend income (0.40) - - (132.60) (127.40)
Interest income (1,255.70) (868.40) (538.60) (967.10) (967.70)
Profit on derivative contract
- - - (977.40)
Loss / (profit) on sale /
discarding of fixed assets
(net) 669.80 (2,694.80) 70.60 6.80 57.20
Loss on disposal of
subsidiaries 2,722.92 - - - -
Gain on sale of current
investments (39.50) (423.60) (274.40) (269.20) (32.40)
Gain on sale of investments - - - (1,700.00) (2,660.30)
Unrealised foreign exchange
(gain) / loss (2,304.85) (129.80) (474.39) (1,136.60) 16.70
Finance costs (including loss
on derivative contracts) (net) 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Operating profit before
working capital changes
and before net results of
Radio Business (17,943.72) (3,935.46) 6,981.06 15,197.14 11,687.89
Adjustment for cash loss
pertaining to transaction
relating to Radio business till
March 31, 2008, pursuant to
the Modified Composite
Scheme of Amalgamation
and Arrangement - - - - (8,377.00)
(17,943.72) (3,935.46) 6,981.06 15,197.14 3,310.89
Operating profit before
working capital changes
Adjustment for :
(Increase) / decrease in trade
receivables (2,083.40) (393.30) (2,513.90) (17,371.80) (7,658.94)
54
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Decrease / (increase) in loans
and advances and other
assets 2,806.20 (5,004.24) (1,670.40) 7,719.20 (1,370.40)
(Increase) / Decrease / in
Inventories (178.50) (417.00) (231.50) 80.10 (551.40)
Increase / (decrease) in trade
and other payable 7,912.90 3,345.12 4,196.26 (2,084.43) 10,404.08
Adjustment for Katch 22
merger due to Scheme of
Amalgamation - - - - 23.30
Cash (used in) / generated
from operating activities (9,486.52) (6,404.88) 6,761.52 3,540.21 4,157.53
Taxes paid (net of refunds) 1,198.30 1,188.26 (1,467.09) (1,974.50) (1,628.70)
Net cash (used in) /
generated from operating
activities (A) (8,288.22) (5,216.62) 5,294.43 1,565.71 2,528.83
B
Cash flow from investing
activities
Purchase of fixed assets (8,721.73) (22,335.80) (40,917.60) (35,911.00) (49,772.50)
Proceeds from sale of fixed
assets 1,914.10 13,999.70 23.10 1,097.50 14.10
Purchase of investment- long
term- in shares of
subsidiaries companies/
joint venture/ associates - (90.80) (3,001.00) (7,861.20) (2,653.60)
Profit from / investment in
mutual funds (net) 39.50 423.60 274.40 269.20 32.40
Red-emption of / investment
in mutual funds - 7,983.98 (7,982.03) 13,556.69 (13,623.83)
Purchase of investment- long
term- other - - (9.90) (4.30) (0.30)
Proceeds on sale of non-
current investments / rights
therein 9,092.50 23.10 4,066.80 3,127.30 -
(Investment in) /
withdrawals‟ from
Partnership firm 33.26 (15.80) 371.80 278.30 -
Dividend income
- - 132.60 127.40
Dividend income 0.40
Advance towards share
application (6,811.20)
Interest income 1,368.30 784.50 647.30 1,626.10 288.20
Cash (used)/ generated in
investing activities (3,084.87) 772.48 (46,527.13) (23,688.81) (65,588.13)
55
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Taxed paid (net of refunds) (76.80) (25.80) (35.60) (103.10) (194.40)
Net Cash (used)/ generated
in investing activities (B) (3,161.67) 746.68 (46,562.73) (23,791.91) (65,782.53)
C
Cash flow from financing
activities
Proceeds from fresh issue of
share capital (including share
premium) /
preference shares 29,500.00 - - - -
Payment to Minority (994.10) (228.60) (598.60) (212.90) -
Dividend tax paid on
distribution by Subsidiaries
and joint ventures
(9.10) - (12.80) -
Introduction of capital by
minority partners in a
Subsidiary
- 62.99 - -
Profit/ (loss) on option
contract - - - - 977.40
Proceeds from long-term
borrowings 68,308.50 39,775.90 5,489.00 7,826.10 40,000.00
Repayment of Foreign
currency convertible bonds
(15,814.50) - - -
(Repayment) / proceeds from
short term borrowings (net) 3,029.50 (1,003.80) 52,962.60 31,271.20 28,812.30
Repayment of long term
borrowings (62,160.50) (17,083.30) - - -
Interest recoverable from
Reliance Broadcast Network
Limited
(1,448.60) (2,507.90) (2,584.90) -
Recovered from Reliance
Broadcast Network
Limited pursuant to
demerger of Radio business 9,961.40 20,000.00 - - -
Dividend (including dividend
tax) paid (7.90) - - (1,349.20) (1,164.10)
Finance costs (including loss
on derivative contracts) (net) (35,314.00) (18,773.50) (13,414.80) (11,287.10) (4,949.20)
Net cash (used in) /
generated from financing
activities ( C ) 12,322.90 5,414.50 41,993.29 23,650.40 63,676.40
Net (decrease) / increase in
cash and cash equivalent
(A+B+C) 873.01 944.56 724.99 1,424.20 422.70
Cash and cash equivalents as
at beginning of the period 5,521.75 4,557.09 3,659.50 5,830.40 5,101.00
Cash and cash equivalents
taken over on acquisition of (794.96) - 292.10 611.90 -
56
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
subsidiaries
Exchange gain / loss on
translation 99.20 20.10 (119.50) - -
Cash and cash equivalents
disposed on sale of subs/
JV's - - - - -
Adjustment from Composite
Scheme of Amalgamation
and Arrangement / Modified
Composite Scheme of
Amalgamation and
Arrangement / Scheme of
Arrangement / Scheme of
Amalgamation - - - (4,207.00) 306.70
Cash and cash equivalents
as at end of the period 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40
873.01 944.56 724.99 1,424.20 422.70
Note:
1. The above cash flow statement has been prepared under the “Indirect” Method as set out in Accounting
Standard 3 – „Cash Flow Statements‟.
2. During Period 2012, the Company has apportioned the loans received on a short term basis into preference
shares amounting to ` 29,500 lakhs
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
Summary statement of assets and liabilities of the Company, as restated
57
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A
Non-current assets
I Fixed assets
(i) Tangible assets 75,331.83 85,631.03 84,424.23 66,359.33 34,799.90
(ii) Intangible assets 722.20 418.10 184.60 219.00 18,206.10
(iii) Capital work-in-
progress 11,966.60 13,812.70 16,132.50 16,863.20 21,331.01
(iv) Intangible assets under
development - - - - -
II Non-current investments 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45
III Deferred tax assets (net) - - - - -
IV Long-term loans and
advances 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13
V Other non-current assets 62.00 290.30 277.42 59.41 43.75
128,722.57 134,746.13 132,017.01 109,704.98 114,257.34
B Current assets
I Current investments - - 7,902.40 - 13,500.30
II Inventories 658.50 724.50 596.80 518.30 191.80
III Trade receivables 16,179.40 18,741.90 22,119.10 20,202.40 11,640.10
IV Cash and bank balances 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29
V Short-term loans and
advances 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
VI Other current assets 717.60 4,265.20 2,765.47 4,281.48 3,911.16
79,766.60 94,307.00 108,369.43 79,887.31 67,886.33
Liabilities
C Non-current liabilities
I Long-term borrowings 71,412.50 39,870.80 36,416.70 54,230.00 53,099.90
II Deferred tax liabilities (net) - - - - -
III Other long-term liabilities 3,636.70 2,934.69 1,822.66 839.10 342.98
IV Long-term provisions 501.10 695.90 344.50 3,427.40 3,038.34
75,550.30 43,501.39 38,583.86 58,496.50 56,481.22
D Current liabilities
I Short-term borrowings 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60
II Trade payables 12,646.50 10,489.20 7,308.80 5,162.10 8,245.66
III Other current liabilities 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46
IV Short-term provisions 94.00 125.40 31.80 29.30 1,800.65
153,390.40 168,745.58 160,332.22 79,986.13 59,021.37
E Net Worth (A+B-C-D) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
58
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
F Represented by
i) Share capital 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and surplus (net) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
G Net Worth (i+ ii) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
Note :
59
Summary statement of profit and loss of the Company, as restated
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue from operations 76,129.30 48,669.20 45,551.99 48,234.34 26,894.71
Other income 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30
Total revenue 80,454.80 54,287.40 48,625.19 54,882.24 32,280.01
Direct operational expenses 30,064.14 20,449.70 15,631.90 15,752.90 7,585.30
Employee benefits expense 13,856.10 9,882.50 5,969.20 5,645.80 2,272.80
Finance costs (including loss on
derivative contracts) (net) 39,061.20 16,973.30 11,306.60 12,363.70 2,751.34
Depreciation, amortisation and
impairment expense
10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Other expenses 49,813.10 24,594.80 18,427.09 13,743.54 7,150.27
Total expenses 143,583.94 78,635.40 57,422.19 59,802.55 29,730.75
(Loss) / profit before tax and
exceptional items (63,129.14) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Exceptional items (7,227.20) - - - -
(Loss) / profit before tax (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Less - Provision for taxes
- Deferred tax charge / (credit) - - - (134.80) 621.40
- Fringe benefit tax - - - 151.50 71.49
Net (loss)/ profit after tax (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
Summary statement of cash flow of the Company, as restated
(` in lakhs)
60
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
A Cash Flow from operating
activities
Net (loss) / profit before tax,
as restated (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Adjustment for
Depreciation and
amortisation expense 10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Bad debts / advances written-
off 103.60 107.30 50.50 263.00 385.10
Provision for doubtful debts
and advances 8,977.20 1,658.20 121.90 - -
Provision for diminution in
value of non-current
investments 825.10 - - - -
Sundry balances written-off 981.50 - - - -
Capital work-in-progress
written-off 4,424.60
Dividend income (200.40) - (85.30) (205.40) (148.80)
Interest income (1,080.10) (773.20) (406.40) (716.70) (831.50)
Profit on derivative contract - - - - (977.40)
Loss / (profit) on sale /
discarding of fixed assets
(net) 674.20 (2,701.10) 40.80 4.40 56.50
Gain on sale of non-current
investments (766.50) - - - -
Gain on sale of current
investments (39.50) (423.60) (274.40) (269.20) (9.10)
Gain on sale of non-current
investments - - - (1,700.00) (2,660.30)
Provisions written back - - (241.70) - -
Unrealised foreign exchange
(gain) / loss (2,588.50) (305.30) 2,000.20 (807.20) (18.10)
Finance costs (including loss
on derivative contracts) (net) 39,061.20 16,973.30
11,306.60
12,363.70
2,751.34
Operating (loss) / profit
before working
capital changes and before
net results of Radio
business (9,194.54) (3,077.30) 9,802.60 16,308.90 11,068.04
Adjustment for cash loss
pertaining to transaction
relating to Radio business up
to March 31, 2008 pursuant
to Modified Composite
Scheme of Amalgamation
and Arrangement - - - - (8,377.00)
61
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
Operating (loss) / profit
before working capital
changes (9,194.54) (3,077.30) 9,802.60 16,308.90 2,691.04
Adjustment for :
Decrease / (Increase) / in
trade receivables 515.90 2,749.20 (2,008.60) (17,317.60) (7,582.14)
Decrease / (increase) in loans
and advances and other assets 3,918.50 (5,484.91) (1,978.10) (6,541.45) (5,773.14)
Decrease / (increase) in
inventories 66.00 (127.70) (78.50) (325.40) (30.30)
Increase / (decrease) in trade
and other payables 2,393.56 4,988.71 4,863.50 (4,444.30) 9,061.70
Cash generated from / (used
in) from operating activities (2,300.58) (952.00) 10,600.90 (12,319.85) (1,632.84)
Taxes paid (net of refunds) 1,790.10 1,693.00 (1,122.00) (1,544.50) (1,346.80)
Net cash generated from /
(used in) operating
activities (A) (510.48) 741.00 9,478.90 (13,864.35) (2,979.64)
B
Cash flow from investing
activities
Purchase of fixed assets
(5,183.50)
(15,372.10)
(24,733.56)
(21,363.60)
(46,194.40)
Proceeds from sale of fixed
assets 762.40 13,986.70 10.80 1,087.60 12.10
Proceeds on sale of non-
current investments 1,233.62 1.00 4,066.80 3,127.30 -
Loan to subsidiaries and joint
ventures (net) (1,721.70) (13,597.70) (21,195.70) - -
Purchase of non-current
investment - in shares of
subsidiaries companies / joint
venture/ associates (Refer
Note 2) (12,127.00) (2,000.00) (3,005.00) (201.80) (2,720.80)
Advance for application
money towards subscription
of shares in a joint venture - - (125.00) - -
Repayment of capital by
Partnership firm - - 241.70 - -
Purchase of non-current
investments – other - - (9.90) (4.50) (0.40)
Profit from / investment in
mutual funds (net) 39.50 423.60 274.40 269.20 9.10
Redemption of / (investment
in) mutual funds - 7,902.40 (7,902.40) 13,500.30 (13,480.50)
62
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
Dividend income
Interest income
200.40
1,232.00
-
685.90
85.30
425.60
205.40
1,395.40
148.80
238.40
Cash generated from / (used
in) investing activities (15,564.28) (7,970.20) (51,866.96) (1,984.70) (61,987.69)
Taxed paid (net of refunds) (47.30) (17.00) (26.70) (78.10) (194.40)
Net Cash generated from /
(used in) investing activities
(B) (15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)
C Cash flow from financing
activities
Proceeds from long-term
borrowings 66,900.00 37,500.00 3,500.00 - 40,000.00
Proceeds from short-term
borrowings (net) (Refer note
3 below) 4,053.20 2,598.10 54,539.70 31,250.80 28,845.30
Proceeds from issue of
Preference Shares (Refer note
3 below) 29,500.00 - - - -
Repayment of Foreign
currency convertible bonds - (15,814.50) - - -
Repayment of long-term
borrowings (61,020.80) (17,083.30) - - -
Profit on derivative contract - - - - 977.40
Interest recoverable from
Reliance Broadcast Network
Limited - (1,448.60) (2,507.89) (2,584.90) -
Recovered from Reliance
Broadcast Network Limited
pursuant to Scheme of
Arrangement 9,961.40 20,000.00 - - -
Dividend (including dividend
distribution tax) paid - - - (1,349.20) (1,164.10)
Finance costs (including loss
on derivative contracts) (net) (34,561.34) (16,757.90) (13,034.60) (11,201.60) (4,795.30)
Net cash flow (used in) /
generated from financing
activities ( C ) 14,832.46 8,993.80 42,497.21 16,115.10 63,863.30
Net increase in cash and
cash equivalent (A+B+C) (1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Cash and cash equivalents as
at beginning of the period 3,201.10 1,453.50 1,371.05 1,989.10 1,987.53
63
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
Cash and cash equivalents
adjusted pursuant to
Composite Scheme of
Amalgamation and
Arrangement - - - 37.70 1,300.00
Cash and cash equivalents
adjusted pursuant to Modified
Composite Scheme of
Amalgamation and
Arrangement - - - (843.70) -
Cash and cash equivalents
as at end of the period 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10
(1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Note :
1. The above cash flow statement has been prepared under the "Indirect Method" as set out in Accounting
Standard 3 - Cash Flow Statement
2. During Period 2012, the Company has apportioned loan given to a subsidiary into preference shares
amounting to ` 12,000 lakhs
3. During Period 2012, the Company has apportioned the loans received on a short term basis into preference
shares amounting to ` 29,500 lakhs
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
64
THE ISSUE
The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its
entirety by, more detailed information in the chapter entitled “Terms of the Issue” at page 354.
Equity Shares to be issued [●] Equity Shares
Rights Entitlement [●] Equity Share(s) for every [●] fully paid-up Equity Share(s) held
on the Record Date.
Record Date [●]
Face Value per Equity Share ` 5
Issue Price per Equity Share `[●]
Equity Shares outstanding prior to the Issue 4,61,26,170 Equity Shares(1)
Equity Shares outstanding after the Issue
(assuming full subscription for and
Allotment of the Rights Entitlement)
[●] Equity Shares
Terms of the Issue For more information, please see the section entitled “Terms of the
Issue” at page 354.
Use of Issue Proceeds For further information, please see the section entitled “Objects of
the Issue” at page 84.
(1)
The Equity Shareholders of our Company have, at the Annual General meeting held on December 24, 2012 approved a
qualified institutions placement (QIP) of Equity Shares or instruments that are convertible into or exchangeable into Equity
Shares, in one or more tranches, upto an aggregate amount not exceeding ` 50,000 lakhs. Accordingly, our Company may
undertake the QIP in accordance with the ICDR Regulations.
65
GENERAL INFORMATION
Pursuant to the resolution passed by our Board of Directors at its meeting held on July 25, 2012 it has been decided
to make the following offer to the Equity Shareholders, with a right to renounce:
ISSUE OF [●] EQUITY SHARES FOR CASH AT A PREMIUM OF `[●] PER EQUITY SHARE FOR AN
AMOUNT NOT EXCEEDING ` 60,000 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY
SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF [●] EQUITY SHARES FOR EVERY [●]
FULLY PAID-UP EQUITY SHARES HELD ON THE RECORD DATE, THAT IS ON [●]. THE ISSUE
PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES.
Issue Programme
The subscription will open upon the commencement of the banking hours and will close upon the close of banking
hours on the dates mentioned below:
ISSUE OPENS ON LAST DATE FOR RECEIVING
REQUESTS FOR SPLIT
APPLICATION FORMS
ISSUE CLOSES ON
[●] [●] [●]
Registered Office of our Company
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
Mumbai 400 065
Maharashtra
Telephone: +91 22 3980 8900
Facsimile: +91 22 3980 8985
Website: www.reliancemediaworks.com
CIN: L29299MH1987PLC045446
Address of the RoC
Our Company is registered with the RoC, which is situated at the following address:
Registrar of Companies
Everest, 5th
Floor,
100, Marine Drive
Mumbai 400 002
Maharashtra
Board of Directors of our Company
Our Board of Directors consists of:
Name and Designation DIN Address
Gautam Doshi
Non-Executive Non-Independent Director
00004612 402, Hamilton Court, Tagore Road, Santa Cruz
(West), Mumbai 400 054
Amit Khanna
Non-Executive Non-Independent Director
00005430 301, Sea Star, 3rd Floor, Balraj Sahani Marg
Juhu, Mumbai 400 049
Sujal Shah 00058019 9, Ganesh Bhuvan, Natwar Nagar, Road no.2,
66
Name and Designation DIN Address
Non-Executive Independent Director Jogeshwari (East), Mumbai 400 060
Anil Sekhri
Non-Executive Independent Director
00506790 23-A, Krishna Kunj, Opp. Millat Nagar, Off.
New Link Road, Andheri (West), Mumbai 400
053
Prasoon Joshi
Non-Executive Independent Director
01260545 201-202, B Wing, Quantum Park Building
Union Park, Khar (West), Mumbai 400 052
For further details of our Directors, please see the chapter entitled “Our Management” at page 212.
Company Secretary and Compliance Officer
Ashish Agarwal is the Company Secretary and Compliance Officer of our Company. His details are as follows:
Ashish Agarwal
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
Mumbai 400 065
Maharashtra
India
Tel: +91 22 3980 8900
Facsimile: +91 22 3980 8985
Email: [email protected]
Investors may contact the Registrar to the Issue or our Company Secretary and Compliance Officer for any pre-Issue
/ post-Issue related matter. All grievances relating to the ASBA process may be addressed to the Registrar to the
Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares
applied for, amount blocked, ASBA Account number and the designated branch of the SCSB where the CAF was
submitted by the ASBA Investors.
Lead Manager
Axis Capital Limited
Axis House, 1st Floor,
C-2 Wadia International Centre,
P.B. Marg, Worli, Mumbai – 400 025
Telephone: +91 22 4325 3150
Facsimile: +91 22 4325 3000
Email: [email protected]
Website: www.axiscapital.co.in / www.enam.com
Investor Grievance Email: [email protected]
Contact Person: Vivek Toshniwal
SEBI Registration Number: INM000012029
Legal Advisors to the Issue
Bharucha & Partners
2nd
Floor, Hague Building,
9, S. S. Ram Gulam Marg,
Ballard Estate,
Mumbai 400 001
Telephone: +91 22 6132 3900
67
Facsimile: +91 22 6633 3900
Email: [email protected]
Auditors to our Company
B S R & Co., Chartered Accountants
KPMG Lodha Excelus
1st Floor, Apollo Mills Compound
N.M. Joshi Marg
Mahalakshmi
Mumbai 400 011
Telephone: +91 22 3989 6000
Facsimile: +91 22 3983 5010
Email: [email protected]
Chaturvedi & Shah, Chartered Accountants
714-715 Tulsiani Chambers
212, Nariman Point
Mumbai 400 021
Telephone: +91 22 30218500
Facsimile: +91 22 302185 95
Email: [email protected]
Registrar to the Issue
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Telephone: +91 22 2596 7878
Toll-free: 1-800-22-0878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR000004058
Bankers to the Issue
[●]
Bankers to our Company
Yes Bank Limited
Indiabulls Finance Centre,
Tower II, 25th
Floor,
S.B. Marg,
Elphinstone (West),
Mumbai 400 013
Telephone: +91 22 3347 9158
Email : [email protected]
Syndicate Bank
Nariman Point Branch
227, Nariman Bhavan, Ground Floor,
Nariman Point,
Mumbai 400 021
Telephone : +91 22 22029881 / 2284 2865
Facsimile: +91 22 2202 4812
Email : [email protected]
Axis Bank Limited
Axis House, 7th
Floor,
Bombay Dyeing Mill Compound,
P. B. Marg, Worli,
Mumbai 400 029
Telephone: +91 22 2425 3734
Facsimile: +91 22 2424 1700
Email : [email protected]
Union Bank of India
Industrial Finance Branch
Union Bank Bhavan,
239, Vidhan Bhavan Marg,
Nariman Point,
Mumbai 400 021
Telephone: +91 22 2289 2021
Facsimile: +91 22 2285 5037 / 2204 0023
68
Email : [email protected]
Bank of Baroda
Chakala Branch
Apple Heritage,
Andheri (East),
Mumbai 400 093
Telephone: +91 22 26877314 / 26879832
Facsimile No. : +91 22 2687 8307
Email : [email protected]
Allahabad Bank
Goregaon Branch
Kiran Industrial Estate,
M. G. Road,
Goregaon (W),
Mumbai 400 062
Telephone: 022 2872 2139
Facsimile: 022 2873 7386
Email : [email protected]
Jammu & Kashmir Bank Limited
B.O. E – 9, South Ext. Part II,
New Delhi 110 049
Telephone : +91 11 2625 8850
Facsimile: +91 11 2625 4009
Email : [email protected]
Vijaya Bank
Industrial Finance Branch
New Excelsior Building,
2nd
Floor, Fort,
Mumbai 400 001
Telephone: +91 22 2206 4756
Facsimile: +91 22 2207 5994
Email : [email protected]
Export Import Bank of India
Centre One Building,
Floor no 21, World Trade Centre Complex,
Cuffe Parade,
Mumbai 400 005
Telephone: +91 22 2217 2409
Fax No. : +91 22 2218 8076
Email : [email protected]
HDFC Bank Limited
Corporate Banking
2nd
Floor, Process House,
Kamala Mills Compound,
S. B. Marg, Lower Parel,
Mumbai 400 013
Telephone: +91 22 2490 1810
Facsimile: +91 22 2496 3994
Email : [email protected]
Self Certified Syndicate Banks
The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on
http://www.sebi.gov.in.
Expert Opinion
Except for:
the report of our Auditors with respect to the audit report dated March 11, 2013 in the form and context it
appears in this Draft Letter of Offer; and
the report on the statement of tax benefits dated February 26, 2013 received from Jitendra Sanghavi & Co.,
Chartered Accountants, in the form and context in which it appears in this Draft Letter of Offer,
we have not obtained any other expert opinion in relation to this issue.
Monitoring Agency
Since the Issue size is in excess of `50,000 lakhs, in accordance with Regulation 16 of the ICDR Regulations, our
Company is required to appoint a Monitoring Agency. Our Company will appoint a Monitoring Agency prior to
filing of the Letter of Offer.
Statement of responsibility of the Lead Manager
69
Axis Capital Limited is the sole Lead Manager to the Issue and all the responsibilities relating to coordination and
other activities in relation to the Issue shall be performed by it. The various activities have been set forth below:
Sr. No. Activities
1. Structuring of the Issue in conformity with the ICDR Regulations, undertaking liaison with the Stock
Exchanges, as may be required under the prevailing framework of regulations/rules/guidelines issued by the
SEBI and the Stock Exchanges.
2. Assisting our Company and its legal advisors in drafting the Letter of Offer, the Abridged Letter of Offer
and the CAF; conduct due diligence as may be required on our Company and assist in compliance with
regulatory requirements of the SEBI and the Stock Exchanges. The Lead Manager shall ensure compliance
with the ICDR Regulations and other stipulated requirements and completion of prescribed formalities with
the Stock Exchanges and the SEBI.
3. Assisting in the listing of the Equity Shares issued pursuant to the Issue on the Stock Exchanges.
4. Assist in the selection of various agencies connected with the Issue, including printers, advertising agencies,
legal advisors, bankers to the Issue (selecting collection centers) and Registrar to the Issue.
5. The post issue activities will involve essential follow up steps which must include finalization of basis of
allotment, listing of instruments and dispatch of certificates and refunds, if any, with the various agencies
connected with the activities such as Registrars to the Issue, Bankers to the Issue. Whilst, many of the post
issue activities will be handled by other intermediaries, the Lead Manager shall be responsible for ensuring
that these agencies fulfill their functions and enable them to discharge this responsibility through suitable
agreements with the Issuer Company.
Credit Rating
As the Issue is of Equity Shares, credit rating is not required for this Issue.
Trustees
As the Issue is of Equity Shares, the appointment of trustees is not required.
Appraisal Reports
None of the purposes for which the Net Proceeds are proposed to be utilised have been appraised by any bank or
financial institution.
Book Building Process
As the Issue is a rights issue, the Issue will not be made through the book building process.
Underwriting
The Issue is not underwritten.
70
CAPITAL STRUCTURE
The share capital of our Company as on the date of this Draft Letter of Offer is set forth below:
(In `, except share data)
Aggregate value at face
value
Aggregate value at
Issue Price
A AUTHORISED SHARE CAPITAL
48,00,00,000 Equity Shares of `5/- each 240,00,00,000
2,00,00,000 Preference Shares of `5/- each. 10,00,00,000
Total 250,00,00,000
B ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
BEFORE THE ISSUE
4,61,26,170 fully paid up Equity Shares of `5/- each 23,06,30,850
10%, 29,50,000 Redeemable Non Convertible
Preference Shares of `5/- each 1,47,50,000
Total 24,53,80,850
C
PRESENT ISSUE BEING OFFERED TO THE
EXISTING EQUITY SHAREHOLDERS
THROUGH THIS DRAFT LETTER OF OFFER
[●] Equity Shares at an Issue Price of ` [●] per Equity
Share [●] [●]
D ISSUED, SUBSCRIBED AND PAID UP CAPITAL
AFTER THE ISSUE
[●] Equity Shares of `5/- each fully paid-up [●]
10%, 29,50,000 Redeemable Non Convertible
Preference Shares of `5/- each 1,47,50,000
E SECURITIES PREMIUM ACCOUNT
Before the Issue 761,69,98,808
After the Issue [●]
The Issue of Equity Shares has been authorised by our Board of Directors pursuant to its resolution dated July 25,
2012.
Changes in the Authorised Capital of our Company
1. The initial authorised share capital of `25,00,000 divided into 25,000 equity shares of `100/- each was sub-
divided into 2,50,000 equity shares of `10/- each pursuant to a resolution of our shareholders passed on
November 1, 1999.
2. The authorised share capital of `25,00,000 divided into 2,50,000 equity shares of `10/- each was increased
to `12,00,00,000 divided into 1,20,00,000 equity shares of `10/- each pursuant to a resolution of the
shareholders passed on November 1, 1999.
3. The authorised share capital of `12,00,00,000 divided into 1,20,00,000 equity shares of `10/- each was sub-
divided into 2,40,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on
August 1, 2000.
71
4. The authorised share capital of `12,00,00,000 divided into 2,40,00,000 Equity Shares of `5/- each was
increased to `15,00,00,000 divided into 3,00,00,000 Equity Shares of `5/- each pursuant to a resolution of
the shareholders passed on May 14, 2005.
5. The authorised share capital of `15,00,00,000 divided into 3,00,00,000 Equity Shares of `5/- each was
increased to `25,00,00,000 divided into 5,00,00,000 Equity Shares of `5/- each pursuant to a resolution of
the shareholders passed on July 26, 2005.
6. The authorised share capital of `25,00,00,000 divided into 5,00,00,000 Equity Shares of `5/- each was
increased to `30,00,00,000 divided into 6,00,00,000 Equity Shares of `5/- each pursuant to a resolution of
the shareholders passed on January 12, 2006.
7. The authorised share capital of `30,00,00,000 divided into 6,00,00,000 Equity Shares of `5/- each was
increased to `46,02,90,000 divided into 9,20,58,000 Equity Shares of `5/- each on May 29, 2009 pursuant
to the scheme of amalgamation amongst Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex
Limited, Mahimna Entertainment Private Limited, Rave Entertainment Private Limited and our Company.
For further details, please see the chapter entitled “History and Certain Corporate Matters – Scheme of
Arrangements” at page 189.
8. The authorised share capital of `46,02,90,000 divided into 9,20,58,000 Equity Shares of `5/- each was
increased to `50,00,00,000 divided into 10,00,00,000 Equity Shares of `5/- each pursuant to a resolution of
the shareholders passed on September 30, 2009.
9. The authorised share capital was reclassified from `50,00,00,000 divided into 10,00,00,000 Equity Shares
of `5/- each, to `50,00,00,000 divided into 8,00,00,000 Equity Shares of `5/- each and 2,00,00,000 (Two
Crore) Preference Shares of `5/- each pursuant to a resolution of the shareholders passed on March 30,
2012.
10. The authorised share capital of `50,00,00,000 divided into 8,00,00,000 Equity Shares of `5/- each and
2,00,00,000 Preference Shares of `5/- each was increased to `250,00,00,000 divided into 48,00,00,000
Equity Shares of `5/- each and 2,00,00,000 preference shares of ` 5/- each pursuant to a resolution of the
shareholders passed on July 13, 2012.
Notes to the Capital Structure
1. Share Capital History of our Company
a. The history of the equity share capital and securities premium account of our Company is detailed in the
following table:
Date of
allotment
No. of
equity
shares
allotted
Face
Value
per
equity
share
(`)
Issue
Price
per
equity
share (`)
Nature of
consideration
Cumulative
number of
equity shares
Cumulative
equity share
capital (`)
Cumulative equity
securities premium
(`)(5)
At
incorporation
200 100/- 100/- Cash 200 20,000 -
February 8,
1990
4,800 100/- 100/- Cash 5,000 5,00,000 -
November 1,
1999
85,00,000 10/-(1) - Bonus in the
ratio of 170:1
85,50,000 8,55,00,000 -
72
Date of
allotment
No. of
equity
shares
allotted
Face
Value
per
equity
share
(`)
Issue
Price
per
equity
share (`)
Nature of
consideration
Cumulative
number of
equity shares
Cumulative
equity share
capital (`)
Cumulative equity
securities premium
(`)(5)
fully paid up
equity shares
out of the
general
reserve
December 2,
1999
300 10/- 10/- Cash 85,50,300 8,55,03,000 -
December 29,
2000
44,00,150 5/-(2) 120/- Cash(3) 2,15,00,750 10,75,03,750 50,60,17,250
May 24, 2005 35,00,000 5/- 150/- Cash 2,50,00,750 12,50,03,750 1,01,35,17,250
August 8, 2005 1,10,00,000 5/- 175.20/- Cash 3,60,00,750 18,00,03,750 2,88,57,17,250
March 31, 2006 38,00,000 5/- 175.20/- Cash 3,98,00,750 19,90,03,750 3,53,24,77,250
November 13,
2007
4,92,754 5/- 543.42/- Cash(4) 4,02,93,504 20,14,67,520 3,79,77,85,858.68
November 22,
2007
7,48,866 5/- 543.42/- Cash(4) 4,10,42,370 20,52,11,850 4,20,09,90,290.40
November 30,
2007
3,99,396 5/- 543.42/- Cash(4) 4,14,41,766 20,72,08,830 4,41,60,33,084.72
December 11,
2007
9,48,565 5/- 543.42/- Cash(4) 4,23,90,331 21,19,51,655 4,92,67,59,452.02
December 19,
2007
7,03,933 5/- 543.42/- Cash(4) 4,30,94,264 21,54,71,320 5,30,57,71,057.88
January 2, 2008 16,22,544 5/- 543.42/- Cash(4) 4,47,16,808 22,35,84,040 6,17,93,81,198.36
January 22,
2008
11,64,734 5/- 543.42/- Cash(4) 4,58,81,542 22,94,07,710 6,80,64,97,278.64
February 5,
2008
1,19,818 5/- 543.42/- Cash(4) 4,60,01,360 23,00,06,800 6,87,10,09,686.20
February 25,
2008
74,886 5/- 543.42/- Cash(4) 4,60,76,246 23,03,81,230 6,91,13,29,806.32
March 17, 2008 49,924 5/- 543.42/- Cash(4) 4,61,26,170 23,06,30,850 6,93,82,09,886.40 (1) On November 1, 1999, face value of the equity shares was sub-divided from `100/- each to `10/- each. (2) On August 1, 2000, face value of the equity shares was sub-divided from `10/- each to `5/- each. (3) Issuance of 44,00,150 Equity Shares pursuant to an initial public offer undertaken by our Company for an
aggregate amount of `5,280.0 lakhs. (4) Equity Shares allotted by our Company pursuant to conversion of foreign currency convertible bonds. (5) Adjustments to the securities premium account: The amount standing to the credit of the securities premium
account was adjusted towards FCCB redemption premium and related issue expenses during the Fiscals 2006 to
2011. Further, it was adjusted pursuant to the various schemes of arrangements undertaken by our Company, as
approved by the respective High Courts, during Fiscal 2008 and Fiscal 2009. For details, please see chapter
entitled “Financial Statements”at page F1.
b. The details of the equity shares allotted for consideration other than cash are provided in the following
table:
Date of
allotment
Name of the
allottee(s)
No. of equity
shares
allotted
Face value
per equity
share (`)
Issue Price
per equity
share (`)
Reasons for the
allotment
November 1,
1999
Existing equity
shareholders of our
Company
85,00,000 10/- - Bonus in the ratio of
170:1 fully paid up equity
shares out of the general
73
Date of
allotment
Name of the
allottee(s)
No. of equity
shares
allotted
Face value
per equity
share (`)
Issue Price
per equity
share (`)
Reasons for the
allotment
reserve
c. The details of the preference shares allotted are provided in the following table:
Date of
allotment
Name of the
allottee(s)
No. of
preference
shares
allotted
Face value per
preference
share (`)
Issue
Price per
equity
share (`)
Reasons for the allotment
March 31,
2012
Reliance Utility
Engineers Private
Limited
17,50,000 5/- 1,000/- For the purpose of networth
rebuilding and strengthening
the long term resource base of
our Company including
meeting working capital
requirements
March 31,
2012
Reliance
Infocomm
Engineering
Private Limited
12,00,000 5/- 1,000/-
2. History of the equity share capital held by our Promoters
a. Details of the build-up of our Promoters‟ shareholding in our Company:
Date of
allotment/
Transfer
Nature of
transaction
No. of
Equity
Shares
Nature of
consideration
Face
value per
Equity
Share (`)
Issue Price
/Average
Acquisition
Price per
Equity Share
(`)
Percentage
of the pre-
Issue
capital
(%)
Percentage
of the post-
Issue
capital (%)
Reliance Land Private Limited
June 30,
2005
Acquisition of
Equity Shares(1) 58,00,000 Cash 5/- 169.00/- 12.57 [●]
August 8,
2005
Preferential
Allotment 1,10,00,000 Cash 5/- 175.20/- 23.85 [●]
March 31,
2006
Conversion of
warrants 38,00,000 Cash 5/- 175.20/- 8.24 [●]
Total 2,06,00,000
44.66 [●]
Reliance Capital Limited
October 1,
2005
Purchase from
secondary market 12,55,000 Cash 5/- 99.19/- 2.72 [●]
January 6,
2009
Purchase from
secondary market 2,00,000 Cash 5/- 214.88/- 0.43 [●]
January 6,
2009
Purchase from
secondary market 2,00,000 Cash 5/- 214.73/- 0.43 [●]
January 7,
2009
Purchase from
secondary market 12,500 Cash 5/- 230.00/- 0.03 [●]
January 7,
2009
Purchase from
secondary market 12,500 Cash 5/- 228.01/- 0.03 [●]
January 9,
2009
Purchase from
secondary market 87,500 Cash 5/- 179.17/- 0.19 [●]
January 9,
2009
Purchase from
secondary market 87,500 Cash 5/- 178.75/- 0.19 [●]
January
12, 2009
Purchase from
secondary market 23,000 Cash 5/- 179.87/- 0.05 [●]
74
Date of
allotment/
Transfer
Nature of
transaction
No. of
Equity
Shares
Nature of
consideration
Face
value per
Equity
Share (`)
Issue Price
/Average
Acquisition
Price per
Equity Share
(`)
Percentage
of the pre-
Issue
capital
(%)
Percentage
of the post-
Issue
capital (%)
January
12, 2009
Purchase from
secondary market 77,000 Cash 5/- 180.03/- 0.17 [●]
January
14, 2009
Purchase from
secondary market 45,000 Cash 5/- 178.75/- 0.10 [●]
January
14, 2009
Purchase from
secondary market 55,000 Cash 5/- 178.87/- 0.12 [●]
February
3, 2009
Purchase from
secondary market 81,000 Cash 5/- 164.59/- 0.18 [●]
February
3, 2009
Purchase from
secondary market 1,19,000 Cash 5/- 165.17/- 0.26 [●]
February
10, 2009
Purchase from
secondary market 50,000 Cash 5/- 170.44/- 0.11 [●]
February
10, 2009
Purchase from
secondary market 50,000 Cash 5/- 170.14/- 0.11 [●]
February
13, 2009
Purchase from
secondary market 86,000 Cash 5/- 178.60/- 0.19 [●]
February
13, 2009
Purchase from
secondary market 1,14,000 Cash 5/- 178.36/- 0.25 [●]
February
18, 2009
Purchase from
secondary market 50,000 Cash 5/- 163.68/- 0.11 [●]
February
18, 2009
Purchase from
secondary market 50,000 Cash 5/- 163.33/- 0.11 [●]
February
25, 2009
Purchase from
secondary market 42,000 Cash 5/- 164.00/- 0.09 [●]
February
25, 2009
Purchase from
secondary market 58,000 Cash 5/- 163.97/- 0.13 [●]
February
26, 2009
Purchase from
secondary market 20,000 Cash 5/- 162.59/- 0.04 [●]
February
26, 2009
Purchase from
secondary market 80,000 Cash 5/- 162.80/- 0.17 [●]
February
27, 2009
Purchase from
secondary market 40,000 Cash 5/- 165.63/- 0.09 [●]
February
27, 2009
Purchase from
secondary market 60,000 Cash 5/- 165.45/- 0.13 [●]
October
14, 2009
Acquisition of
shares(2) 24,00,000 Cash 5/- 355.62/- 5.20 [●]
October
14, 2009
Acquisition of
shares(2) 24,00,000 Cash 5/- 355.62/- 5.20 [●]
November
3, 2009
Purchase from
secondary market 15,000 Cash 5/- 251.03/- 0.03 [●]
November
3, 2009
Purchase from
secondary market 35,000 Cash 5/- 246.20/- 0.08 [●]
November
4, 2009
Purchase from
secondary market 15,000 Cash 5/- 251.73/- 0.03 [●]
November
4, 2009
Purchase from
secondary market 85,000 Cash 5/- 253.06/- 0.18 [●]
November
5, 2009
Purchase from
secondary market 30,000 Cash 5/- 272.23/- 0.07 [●]
November
5, 2009
Purchase from
secondary market 70,000 Cash 5/- 273.40/- 0.15 [●]
November
13, 2009
Purchase from
secondary market 24,000 Cash 5/- 284.95/- 0.05 [●]
75
Date of
allotment/
Transfer
Nature of
transaction
No. of
Equity
Shares
Nature of
consideration
Face
value per
Equity
Share (`)
Issue Price
/Average
Acquisition
Price per
Equity Share
(`)
Percentage
of the pre-
Issue
capital
(%)
Percentage
of the post-
Issue
capital (%)
November
13, 2009
Purchase from
secondary market 26,000 Cash 5/- 284.83/- 0.06 [●]
November
20, 2009
Purchase from
secondary market 15,000 Cash 5/- 282.86/- 0.03 [●]
November
20, 2009
Purchase from
secondary market 35,000 Cash 5/- 282.14/- 0.08 [●]
November
16, 2011
Purchase from
secondary market 1,00,352 Cash 5/- 83.24/- 0.21
[●]
November
17, 2011
Purchase from
secondary market 62,588 Cash 5/- 82.95/- 0.13
[●]
November
18, 2011
Purchase from
secondary market 81,070 Cash 5/- 81.88/- 0.17
[●]
November
22, 2011
Purchase from
secondary market 48,743 Cash 5/- 82.90/- 0.10
[●]
November
24, 2011
Purchase from
secondary market 1,00,000 Cash 5/- 83.50/- 0.21 [●]
November
29, 2011
Purchase from
secondary market 31,613 Cash 5/- 84.61/- 0.06 [●]
Total 85,29,366 18.49 [●]
(1) On June 30, 2005, Reliance Land Private Limited entered into two separate share purchase agreements with
Vasanji Asaria Mamania and Rubaiyat Arun Patel, being erstwhile shareholders of our Company, for acquiring
44,00,000 Equity Shares and 14,00,000 Equity Shares, respectively, i.e. aggregating to 58,00,000 Equity Shares.
(2) On October 14, 2009, there was an intergroup transfer from AAA Entertainment Private Limited to Reliance
Capital Limited.
b. The Issue is exempted from the requirements of minimum promoters‟ contribution in accordance with
Regulation 34(c) of the ICDR Regulations.
c. Our Promoters have, through the letter dated July 26, 2012 (“Subscription Letter”), jointly and severally,
undertaken to (i) apply for Equity Shares being offered to them pursuant to the Issue to the extent of their
Rights Entitlement; (ii) apply directly or through our Company‟s Promoter Group for any Equity Shares
renounced in their favour; and (iii) apply directly or through the Company‟s Promoter Group for any
additional Equity Shares in the Rights Issue only to the extent of any unsubscribed portion of the Rights
Issue, subject to applicable law, to ensure that at least 90% of the Rights Issue is subscribed.
As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in
accordance with the paragraph above, the Promoters may acquire Equity Shares over and above their
Rights Entitlement which may result in an increase in their shareholding, individually and / or collectively,
above their current shareholding. Any such subscription and acquisition of Equity Shares by the Promoters
in the Rights Issue will not result in change of control of the management of the Company in accordance
with Regulation 3 (2) of the Takeover Regulations and shall be exempt in terms of Regulation 10 (4) (b) of
the Takeover Code. Further, such subscription to additional Equity Shares by the Promoters beyond their
Rights Entitlement will be in accordance with the provisions of Regulation 10(4) (b) of the Takeover
Regulations. As such, other than meeting the requirements indicated in the chapter entitled “Objects of the
Issue” at page 84, there is no other intention / purpose for the Issue, including any intention to delist our
Equity Shares, even if, as a result of any Allotment in the Issue to our Promoter(s) and / or the members of
our Promoter Group, the shareholding of our Promoters and/or Promoter Group in our Company exceeds
their current shareholding.
76
However, such participation will not result in breach of minimum public shareholding requirement
stipulated in the equity Listing Agreement entered into between us and the Stock Exchanges.
d. Our Company had availed of unsecured loans aggregating `115,234.50 lakhs (“RCL Loan”) from
Reliance Capital Limited, which is one of our Promoters. As at January 31, 2013, the total amount
outstanding for the RCL Loan was `111,183.43 lakhs. For further details, please see the chapter entitled
“Financial Indebtedness” at page 254. Reliance Capital Limited through its letter dated March 8, 2013 has
consented to adjust the RCL Loan towards share application money against their Rights Entitlements and
additional subscription, if any. Consequently, no fresh Issue proceeds would be received by our Company
to such an extent. For further details, please see the chapter entitled“Objects of the Issue” at page 84.
3. Shareholding Pattern of our Company
The table below presents the shareholding pattern of Equity Shares as on March 1, 2013 is as follows:
77
Category
code
Category of
Shareholder
Number of
Shareholders
Total
number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total number of
shares
Shares Pledged or
otherwise encumbered
As a percentage
of (A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a
percentage
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=(VIII) /
(IV)*100
(A) Shareholding of Promoter
and Promoter Group
NA NA
1 Indian
(a) Individuals/ Hindu Undivided
Family
(b) Central Government/ State
Government(s)
(c) Bodies Corporate 2 2,91,29,366 2,91,29,366 63.15 63.15
(d) Financial Institutions/ Banks
(e) Any Other(Specify)
Sub Total(A)(1) 2 2,91,29,366 2,91,29,366 63.15 63.15
2 Foreign
a Individuals (Non-Resident
Individuals/Foreign
Individuals)
b Bodies Corporate
c Institutions
d Qualified Foreign Investors
e Any Other (specify)
Sub Total(A)(2) 0 0 0 0.00 0.00
78
Category
code
Category of
Shareholder
Number of
Shareholders
Total
number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total number of
shares
Shares Pledged or
otherwise encumbered
As a percentage
of (A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a
percentage
Total Shareholding of
Promoter and Promoter
Group (A)= (A)(1)+(A)(2) 2 2,91,29,366 2,91,29,366 63.15 63.15
(B) Public shareholding N.A. N.A.
1 Institutions N.A. N.A.
(a) Mutual Funds/ UTI 0 0 0 0.00 0.00
(b) Financial Institutions /Banks 4 82,513 82,513 0.18 0.18
(c) Central Government/ State
Government(s)
(d) Venture Capital Funds
(e) Insurance Companies
(f) Foreign Institutional Investors 2 117 117 0.00 0.00
(g) Foreign Venture Capital
Investors
(h) Qualified Foreign Investors
(i) Any Other (specify)
1. Trust 0 0 0 0.00 0.00
Sub-Total (B)(1) 6 82,630 82,630 0.18 0.18
2 Non-institutions
(a) Bodies Corporate
1,115
35,97,624
35,97,624 7.80 7.80
9,52,012 26.46
(b) Individuals-
79
Category
code
Category of
Shareholder
Number of
Shareholders
Total
number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total number of
shares
Shares Pledged or
otherwise encumbered
As a percentage
of (A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a
percentage
i. Individual shareholders
holding nominal share capital
up to `1 lakh
94,097
1,03,57,604
1,03,28,533 22.45 22.45
2,39,937 2.32
ii. Individual shareholders
holding nominal share
capital in excess of `1 lakh. 30
20,36,631
20,36,631 4.41 4.41
3,55,700 17.47
(c) Qualified Foreign Investors
(d) Any Other (specify)
1. Clearing Member
250
6,65,213
6,65,213
1.44 1.44
38,048 5.72
2. NRI (Repartriate)
581
2,26,327
2,26,277
0.49
0.49
3. NRI (Non-Repartriate)
158
29,871
29871 0.06 0.06
4. HUF 1 900 0 0.00 0.00
5. Trust 1 4 4 0.00 0.00
Sub-Total (B)(2)
96,233
1,69,14,174
1,68,84,153
36.67 36.67
15,85,792
9.38
Total Public
Shareholding (B)=
(B)(1)+(B)(2)
96,239
1,69,96,804
1.69.66.783
36.85
36.85
15,85,792 9.33
TOTAL (A)+(B)
96,241 4,61,26,170
4,60,96,149
100.00 100.00 1585792
3.44
80
Category
code
Category of
Shareholder
Number of
Shareholders
Total
number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total number of
shares
Shares Pledged or
otherwise encumbered
As a percentage
of (A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a
percentage
(C) Shares held by Custodians
and against which
Depository Receipts have
been issued N.A. N.A. N.A.
1 Promoter and Promoter
Group
2 Public
GRAND TOTAL
(A)+(B)+(C)
96,241
4,61,26,170
4,60,96,149 100.00 100.00
15,85,792
3.44
81
4. The list of top 10 shareholders of our Company and the number of Equity Shares held by
them is as under:
a. As of March 10, 2013:
Sr.
No.
Name of the Shareholder Number of Equity
Shares held
Percentage of
shareholding 1. Reliance Land Private Limited 2,06,00,000 44.66
2. Reliance Capital Limited 85,29,366 18.49
3. Manmohan Shetty 5,22,484 1.13
4. Bonanza Portfolio Limited 3,00,756 0.65
Thalia Infratech Private Limited 2,04,000 0.44
7. Sharda Goyal 2,00,000 0.43
5. GEPL Capital Private Limited- H. O. (BSE) 1,69,916 0.37
8. Rajender Parshad Gupta 1,60,000 0.35
9. Veena Gupta 1,60,000 0.35
10. Vimgi Investments Pvt Ltd 1,56,884 0.34
b. As of March 1, 2013:
Sr. No. Name of the Shareholder Number of Equity
Shares held
Percentage of
shareholding
1. Reliance Land Private Limited 2,06,00,000 44.66
2. Reliance Capital Limited 85,29,366 18.49
3. Manmohan Shetty 5,22,484 1.13
4. Bonanza Portfolio Limited 2,98,778 0.65
5. GEPL Capital Private Limited 2,12,500 0.46
6. Thalia Infratech Private Limited 2,04,000 0.44
7. Sharda Goyal 2,00,000 0.43
8. Rajender Parshad Gupta 1,60,000 0.35
9. Veena Gupta 1,60,000 0.35
10. Vimgi Investments Pvt Ltd 1,56,884 0.34
c. As of March 11, 2011:
Sr. No. Name of the shareholder Number of Equity
Shares held
Percentage of
shareholding 1. Reliance Land Private Limited 2,06,00,000 44.66
2. Reliance Capital Limited 81,05,000 17.57
3. Manmohan Shetty 18,91,234 4.10
4. Deutsche Securities Mauritius Limited 4,08,600 0.89
5. BNP Paribas Arbitrage 3,83,400 0.83
6. JM Financial Services Private Limited 3,34,000 0.72
7. Credit Suisee (Singapore) Limited 2,73,000 0.59
8. Thalia Infratech Private Limited 2,04,000 0.44
9. Globe Capital Market Limited 1,92,417 0.42
10. DLF Commercial Developers Limited 1,15,942 0.25
5. Our Company, our Directors and the Lead Manager have not entered into any buy-back
arrangement and / or safety net facility for purchase of Equity Shares from any person.
82
6. Our Company has not issued Equity Shares during a period of one year preceding the date of this
Draft Letter of Offer.
7. None of our Promoters, directors of our Promoters, Promoter Group, our Directors and their
immediate relatives have purchased or sold any Equity Shares during a period of six months
preceding the date on which this Draft Letter of Offer with SEBI.
8. Except as stated in the chapter entitled “Our Management” at page 212, none of our Directors and
their immediate relatives or key management personnel hold any Equity Shares. Further, except
Reliance Securities Limited, which holds one Equity Share in our Company, none of our Promoter
Group or directors of our Promoters hold any Equity Shares in our Company.
9. Preferential allotments made by our Company after being a listed company have been made in
compliance with the relevant provisions of applicable law.
10. Our Company has not issued any Equity Shares out of revaluation reserves.
11. Our Company has 96,273 members as of March 10, 2013.
12. Except as stated in the chapters entitled “Capital Structure” at page 70 and “History and Certain
Coporate Matters” at page 189, our Company has not issued any Equity Shares pursuant to any
scheme approved under the Sections 391-394 of the Companies Act.
13. Neither the Lead Manager nor any associates of the Lead Manager hold any Equity Shares in our
Company.
14. All Equity Shares will be fully paid up at the time of Allotment failing which such Equity Shares
may be forfeited for non-payment of calls within 12 months from the date of Allotment.
15. There are no outstanding warrants, options or rights to convert debentures, loans or other
instruments convertible into the Equity Shares.
16. There have been no financial arrangements whereby our Promoter Group, our Directors and their
relatives have financed the purchase by any other person of securities of our Company, other than
in the normal course of the business of the financing entity during a period of six months preceding
the date of filing of this Draft Letter of Offer.
17. Our Company‟s shareholders have at the AGM held on December 24, 2012 approved a qualified
institutions placement (“QIP”) of Equity Shares or instruments that are convertible into or
exchangeable with Equity Shares, in one or more tranches, upto an aggregate amount not
exceeding `50,000 lakhs. Our Company may undertake the QIP in accordance with the ICDR
Regulations, which may not be possible if our company has a negative networth as per the audited
balance sheet of the previous financial year. Except as stated above, there will be no further issue
of Equity Shares, whether by way of issue of bonus shares, preferential allotment, rights issue, or
in any other manner during the period commencing from submission of this Draft Letter of Offer
with SEBI until the Equity Shares have been listed.
18. Except the QIP as set out above, our Company presently does not intend or propose to alter the
capital structure for a period of six months from the Issue Opening Date, by way of split or
consolidation of the denomination of Equity Shares or further issue of Equity Shares (including
issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares)
whether on a preferential basis or issue of bonus or rights or further public issue of specified
securities or otherwise. However, if our Company enters into acquisitions, joint ventures or other
arrangements, our Company may, subject to necessary approvals, consider raising additional
83
capital to fund such activity or use Equity Shares as currency for acquisitions or participation in
such joint ventures.
19. Further, the shareholders of our Company pursuant to a resolution passed at the AGM held on
August 31, 2010 have in terms of section 81(1A) of the Companies Act and the SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, accorded their
consent to our Board of Directors to introduce and implement the Reliance MediaWorks Employee
Stock Option Scheme (“ESOS Scheme”). In terms of the resolution, our Board of Directors is also
authorised to issue and allot Equity Shares of our Company and/or options giving rights to
purchase or subscribe such number of Equity Shares/equity linked instruments including
depository receipts (“ESOS Securities”) which could give rise to the issue of Equity Shares of our
Company, to the permanent employees of our Company, our Subsidiaries and our Directors on
such terms as may be decided by our Board of Directors.
Additionally, the number of ESOS Securities issued to any single employee, including any non
executive or independent director, during any one year shall be less than 1% of the issued and paid
up Equity Shares of our Company i.e. upto 4,61,261 Equity Shares. However, the aggregate number
of securities issued shall not exceed 10% of the paid up share capital of our Company as on August
2, 2010 i.e. 46,12,617 Equity Shares.
As on the date of this Draft Letter of Offer, our Company has not granted any ESOS Securities
under the aforesaid scheme.
20. At any given time, there shall be only one denomination of the Equity Shares. Our Company shall
comply with such disclosure and accounting norms as may be specified by SEBI from time to time.
21. The Equity Shares are fully paid up and there are no partly paid up Equity Shares as on the date of
filing this Draft Letter of Offer.
22. The Issue will remain open for a minimum of 15 days. The Board of Directors or duly authorised
committee thereof shall have the right to extend the Issue period as it may determine from time to
time, provided that the issue will not be kept open in excess of 30 days from the Issue Opening
Date.
23. An over-subscription to the extent of 10% of the Issue may be retained for the purpose of rounding
off to the nearer multiple of minimum allotment lot.
84
OBJECTS OF THE ISSUE
The objects of the Issue are:
1. Repayment / prepayment of debt; and
2. General corporate purposes.
The main objects set out in our Memorandum of Association enable us to undertake our existing activities
and the activities for which funds are being raised by us through the Issue.
Requirement of Funds
The details of the Net Proceeds are set forth in the following table:
Sr. No. Description Amount (In ` lakhs)
1. Gross proceeds of the Issue 60,000
2. Issue expenses [●]
3. Net Proceeds [●]
Means of Finance
The following table details the objects of the Issue and the amount proposed to be financed from the Net
Proceeds of the Issue:
Sr.
No.
Objects of the Issue Amount proposed to be
financed from Net
Proceeds of the Issue
(In ` lakhs)
Percentage amount proposed
to be financed from Net
Proceeds of the Issue (%)
1. Repayment/ prepayment of debt to
Reliance Capital Limited, viz one of
our Promoters
38,000 [●]
2. Repayment/ prepayment of debt to
other lenders
17,600 [●]
3. General corporate purposes [●] [●]
Total [●] [●]
Utilization of Net Proceeds
The details of utilisation of net proceeds of the Issue will be in accordance with the table set forth below:
Sr. No. Particulars Amount to be utilised (In `
lakhs)
Fiscal 2014
1. Repayment/ prepayment of debt to Reliance Capital
Limited, viz one of our Promoters
38,000
2. Repayment/ prepayment of debt to certain lenders 17,600
3. General corporate purposes [●]
Total [●]
Details of the Objects of the Issue
The stated objects of the Issue are proposed to be financed entirely out of the Net Proceeds. Accordingly, we
confirm that there is no requirement for us to make firm arrangements of finance through verifiable means
85
towards 75% of the stated means of finance, excluding the amount to be raised through the Issue. The Net
Proceeds, after deduction of all issue expenses, are estimated to be approximately `[●] lakhs. The details in
relation to Objects of the Issue are set forth herein below.
The fund requirement described below is based on the management estimates and is not appraised by any
bank or financial institution. In case of any shortfall or any variation in the actual utilization of funds
earmarked for the objects mentioned above, such shortfall or increased fund deployment for a particular
activity will be financed through internal accruals and additional borrowings. If there is any surplus from the
Net Proceeds after meeting all the above mentioned objects, such surplus proceeds will be used for general
corporate purposes. Further, since the Net Proceeds of the Issue are not intended to be utilized for any
project, there is no schedule of implementation or any deployment of funds.
Our Company has availed of certain long-term and other short-term loan facilities from various banks and
financial institutions and our one of our Promoters. These loan facilities aggregated to `2,70,465.39 lakhs as
at January 31, 2013 and the amount outstanding under these facilities as at January 31, 2013 was
`210,882.50 lakhs. For further details of the long-term and short-term loan facilities availed by our
Company, please see the chapter entitled “Financial Indebtedness” at page 254. Our Company intends to
utilise ` 55,600 lakhs towards repayment and/or pre-payment of a portion of such outstanding debt.
1. Repayment of debt to Reliance Capital Limited
The following table provides the details of the unsecured loans availed by our Company from Reliance
Capital Limited which are proposed to be repaid and/or prepaid out of the Net Proceeds (“Identified
Loans”) as certified by Sandeep S. Shah, Chartered Accountants vide their certificate dated March 8, 2013:
Sr
.
no
.
Name of
the
lenders
Nature of
borrowing
Amount
sanctioned
(In ₹ lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ₹lakhs)
Interest
Tenure
Repayment
1. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
March 7, 2012
25,187.50 21,136.43 13.00%
p.a.
One year from
the date of
disbursement
On Demand
2. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
March 30, 2012
1,900.00 1,900.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
3. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
April 3, 2012
18,850.00 18,850.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
4. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
May 7, 2012
39,840.00 39,840.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
5. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
June 7, 2012
3,863.50 3,863.50 13.00%
p.a.
One year from
the date of
disbursement
On Demand
6. Reliance
Capital
Inter corporate
deposit facility
7,690.00 7,690.00 13.00%
p.a.
One year from
the date of
On Demand
86
Sr
.
no
.
Name of
the
lenders
Nature of
borrowing
Amount
sanctioned
(In ₹ lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ₹lakhs)
Interest
Tenure
Repayment
Limited
agreement dated
July 3, 2012
disbursement
7. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
September 10,
2012
4,565.50 4565.50 13.00%
p.a.
One year from
the date of
disbursement
On Demand
8. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
October 25,
2012
3,238.00 3,238.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
9. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
November 23,
2012
2,400.00 2,400.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
10
.
Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
December 6,
2012
3,500.00 3,500.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
11
.
Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
January 8, 2013
4,200.00 4,200.00 13.00%
p.a.
One year from
the date of
disbursement
On Demand
Total 111,183.43
Each of our Promoters have undertaken by their letters dated July 26, 2012: (a) to apply for Equity Shares
being offered to us pursuant to the Rights Issue to the extent of our Rights Entitlement; (b) to apply directly
or through the Company‟s Promoter Group for any Equity Shares renounced in our favour; and (c) to apply
directly or through the Company‟s Promoter Group for any additional Equity Shares in the Rights Issue only
to the extent of any unsubscribed portion of the Rights Issue, subject to applicable law, to ensure that at least
90% of the Rights Issue is subscribed.
Reliance Capital Limited through its letter dated March 8, 2013 has consented to adjust the RCL Loan
towards share application money against their Rights Entitlements and additional subscription, if any.
Consequently no fresh Issue proceeds would be received by our Company to such an extent.
None of the identified loans provide for any penalty in the event of pre-payment of the outstanding amounts
under such loans.
2. Repayment / pre-payment of loans from other lenders
A. Loans from banks
In addition to the above, we may also repay/pre-pay loan facilities availed from various financial institutions,
87
including banks, in part or full. Details of our outstanding loan facilities as certified by Sandeep S. Shah,
Chartered Accountants vide their certificate dated March 8, 2013, are set out below.
Sr.
No.
Name of the
lender
Nature and date of the
loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31,
2013(in ₹ lakhs)
Amount
outstanding
as at
January 31,
2013 (in ₹
lakhs)
Interest
(% per
annum)
1 Allahabad
Bank
Term loan agreement
June 27, 2012
Repayment
of existing
commercial
paper and
incurring
fresh capital
expenditure
5,000.00 1,666.67
13.25% -
(SBPLR –
1.50%) p.a.
2 Export Import
Bank
Term loan agreement
June 27, 2012
7,000.00 2,333.34
3 Jammu &
Kashmir Bank
Term loan agreement
June 27, 2012
7,000.00 2,333.34
4 Syndicate
Bank
Term loan agreement
June 27, 2012
7,000.00 2,333.34
5 Union Bank of
India
Term loan agreement
June 27, 2012
6,000.00 2,000.00
6 Vijaya Bank Term loan agreement
June 27, 2012
8,000.00 2,666.67
7 Union Bank of
India
Term loan agreement
dated January 29, 2010
and review letter dated
January 18, 2010 as
modified by the
sanction letter dated
February 9, 2010
For
financing
our
Company‟s
Studio
project in
Mumbai
8,000.00 4,400.00 Base Rate +
3.50% p.a.
8 Syndicate
Bank
General Agreement
dated June 11, 2010 and
the sanction letter dated
May 31, 2010 as
supplemented by letter
dated July 18, 2011
For
augmenting
long term
working
capital
requirement
15,000.00 9,375.00 Base Rate +
2.50% p.a.
9 Syndicate
Bank
General agreement
dated June 10, 2011 and
sanction letter dated
June 6, 2011
Long term
working
capital
10,000.00 10,000.00 Base rate +
1% p.a.
10 Barclays Bank
PLC
Redeemable Non –
Convertible Debentures
4,400.00 3,300.00 12.50% p.a.,
compounded
monthly,
payable
quarterly in
arrears
Total 77,400.00 40,408.36
B. Loans from other lenders
Loans from other lenders as certified by Sandeep S. Shah, Chartered Accountants vide their certificate dated
March 8, 2013, are set out below:
88
Sr.
No.
Name of the
lender
Nature and date of the loan
agreement/sanction letter
Amount
sanctioned
as at
January 31,
2013 (in ₹ lakhs)
Amount
outstanding as
at January 31,
2013 (in ₹
lakhs)
Interest
(% per
annum)
1. Magma Fin Corp
Ltd
Inter corporate deposit
facility agreement dated
March 26, 2012
2,200.00 2,200.00 12.00% p.a.
2. Magma Fin Corp
Ltd
Inter corporate deposit
facility agreement dated
April 30, 2012
1,300.00 1,300.00 12.00% p.a.
Total 3,500.00 3,500.00
Our Company intends to utilise the Net Proceeds to pre-pay / repay, in part or full, some of our outstanding
loans availed of from various financial institutions including banks. The rationale for pre-paying / repaying
these facilities, inter alia, is to reduce our prevailing high interest costs and to increase our administrative
and operating flexibility.
We will identify the facilities to be repaid based, amongst others, on the factors set out below.
a. Sanction limits granted;
b. Existence of other facilities from the same lender;
c. Prevailing rate of interest; and
d. Operational flexibility.
89
The details of outstanding loan facilities availed from one of our Promoter, various financial institutions, banks and others along with end utilization of the same, as certified by
Sandeep S. Shah, Chartered Accountants vide their certificate dated March 8, 2013, are as follows:
Table A: Unsecured inter-corporate deposits taken from Promoters – Reliance Capital Limited
Sr.
no.
Name
of the
lenders
Nature of
borrowing
Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
1. Reliance Capital
Limited
Inter corporate
deposit
facility agreement
dated
March 7, 2012
25,187.50 21,136.43 13.00% p.a.
One year from the date
of
disbursement
On Demand Towards repaying commercial paper
(CP) aggregating
`10,500 lakhs on March 31, 2012.
The CP was issued on November 23,
2011 to Yes Bank.
Towards to repaying a part of
CP‟s aggregating
` 12,500 lakhs on November 25,
2011. The CP was issued to Yes
Bank on February
25, 2011 (Net proceeds from
issue# – `
11,490.20 lakhs)
Towards repaying a
loan of ` 10,000 lakhs
availed from Bank of
India. The loan was availed of on May 28,
2010 and was repaid on February 28, 2011
,
Towards repaying
CP aggregating `
2,500 lakhs issued
to IFCI Limited on March 4, 2010 and
balance ` 7,500 lakhs was used to
repay a part of a
Syndicate Bank loan
of ` 10,000 lakhs
raised on December 24, 2009.
Refer note no. 3 below for details
of utilization of
CP issued to IFCI Limited
The loan from Syndicate Bank
was used towards
repaying a loan
of ` 10,000 lakhs
availed from Allahabad Bank
on January 9,
2009. The loan was repaid on
January 8, 2010.
Refer note no 5 for details of
Allahabad Bank
loan utilization
Funding subsidiaries
towards their capital
expenditure and working capital
requirements – ` 267.71 lakhs (End
Use)
Working capital
requirements of the
90
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Company – `
1,222.49 lakhs (End
Use)
Towards repaying
an installment of a
loan aggregating to
` 10,000 lakhs
availed of from
Syndicate Bank – ` 1,250 lakhs
The loan was
drawn in various
tranches
aggregating `
10,000 lakhs.
The first
drawdown of `
2,500 lakhs was on September 18,
2009.
` 1,080 lakhs
towards capital
expenditure for the Company‟s
theatrical
exhibition business. (End
Use)
` 689.50 lakhs -
Funding
subsidiaries towards their
capital
expenditure and working capital
requirements
(End Use)
` 730.50 lakhs
towards the Company‟s
working capital
requirements (End Use)
Second
drawdown of ` 3,500 lakhs was
on September 29,
2009.
` 763.50 lakhs -
Funding subsidiaries
towards their
capital expenditure and
working capital
requirements (End Use)
` 760 lakhs
91
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
towards capital
expenditure for
the Company‟s
theatrical
exhibition
business (End
Use)
` 737 lakhs
towards capital expenditure for
the Company‟s film production
services business
(End Use).
` 1,239.50 lakhs
towards the
Company‟s working capital
requirements
(End Use)
Third drawdown
of ` 2,000 lakhs
was October 29, 2009.
` 190 lakhs –
Funding subsidiaries
towards their
capital expenditure and
working capital
requirements (End Use)
` 481.31 lakhs
towards capital expenditure for
the Company‟s
theatrical exhibition
business(End
92
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Use)
` 682.39 lakhs
towards capital
expenditure for
the Company‟s
film production services business
(End Use)
` 646.30 lakhs towards the
Company‟s working capital
requirements
(End Use)
Fourth drawdown
of ` 2,000 lakhs –
December 29, 2009
` 1,500 lakhs -
funding
subsidiaries towards their
capital
expenditure and working capital
requirements (End Use)–
` 357.68 lakhs
towards capital expenditure for
the Company‟s
film production services business
(End Use).
` 142.32 lakhs towards the
Company‟s working capital
requirements
(End Use)
93
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Towards repaying a
sum of ` 937.50
lakhs, an
installment of a
loan aggregating ` 15,000 lakhs
availed of from
Syndicate Bank –
Loan of ` 15,000
lakhs availed
from Syndicate
Bank on June 14,
2010
Towards repaying
loan of ` 10,000 lakhs
availed from Union
Bank of India and
drawn down on
December 15, 2009 and December 30,
2009. The loan was
repaid on June 15, 2010.
Towards repaying a
secured loan of `
10,000 lakhs availed
from Syndicate
Bank on December
31,2008. The loan was repaid on
December 30, 2009.
Refer note no 1
below
` 1,733 lakhs - Funding
subsidiaries
towards their capital
expenditure and
working capital requirements
(End Use)
` 209 lakhs towards capital
expenditure for
the Company‟s theatrical
exhibition
business (End
Use).
` 1,066.90 lakhs towards capital
expenditure for
the Company‟s film production
services business.
(End Use)
` 1,991.10 lakhs
towards the
94
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Company‟s
working capital
requirements
(End Use)
Towards repaying
CPs worth `12,500 lakhs on March 9,
2012. The CP was
issued on October 10, 2011 to Yes
Bank. (Net
proceeds from
issue# – `
11,920.55)
Used to repay
CPs of ` 10,000
raised from
Franklin
Templeton on
February 3, 2011.
The CP was
repaid on October
12, 2011. (Net
proceeds from
issue# – `
9,252.39)
Used to repay CPs of
` 7,500 lakhs raised from LIC Income Plus
MF on May 19, 2010.
The CPs were repaid on February 4, 2011
(Net proceeds from
issue# – ` 7,191.46)
Used to repay
CPs of ` 2,500 lakhs
and ` 1,500 lakhs raised
on November
25, 2009 and November 30,
2009,
respectively, from JM
Mutual Fund.
The CPs were repaid on May
25, 2010.
` 713 lakhs towards
capital expenditure of
theatrical
exhibition
business (End
Use).
` 203.11 lakhs towards
capital expenditure of
film
Refer note no 4
95
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
production
services
business (End
Use).
Working
capital requirements
of the
Company – ` 2,275.35
lakhs (End
Use)
` 310 lakhs towards capital
expenditure for
the Company‟s film production
services business.
(End Use)
` 508.52 lakhs
towards capital expenditure for
the Company‟s
theatrical exhibition
business. (End
Use)
` 933.87 lakhs
towards the Company‟s
96
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
working capital
requirements
(End Use)
` 1,920.15 lakhs
towards the
Company‟s
working capital
requirements part
(End Use)
2. Reliance Capital
Limited
Inter corporate
deposit
facility agreement
dated
March 30, 2012
1,900.00 1,900.00 13.00% p.a.
One year from the date
of
disbursement
On Demand ` 1,900 lakhs towards the
Company‟s
working capital requirements (End
Use)
3. Reliance
Capital
Limited
Inter
corporate
deposit facility
agreement dated
April 3,
2012
18,850.00 18,850.00 13.00%
p.a.
One year
from the date
of disbursement
On Demand Repayment of loan
from DBS Bank – ` 15,000 lakhs
The loan from
DBS Bank of ` 15,000 lakhs was
used to repay /
redeem outstanding
foreign currency
convertible bonds
aggregating Euro
20.65 million i.e.
` 15,488.66 lakhs.
The FCCB proceeds of Euro 84 million (`
45,719.94 lakhs) was utilized to inter alia for:
Establishing / acquiring new theatrical
exhibition complexes - ` 7,258.75 lakhs;
Film distribution - ` 1,394 lakhs;
Film production - ` 15,271.11 lakhs; and
Radio business - ` 16,630.82 lakhs.
(End Use)
Repayment of a
Yes Bank loan of ` 2,000 lakhs.
` 2,000 lakhs towards the
Company‟s
working capital
97
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
requirements.
(End Use)
` 1,850 lakhs
towards the Company‟s
working capital
requirements (End
Use)
4. Reliance
Capital Limited
Inter
corporate deposit
facility
agreement dated May
7, 2012
39,840.00 39,840.00 13.00%
p.a.
One year
from the date of
disbursement
On Demand Repayment of a
Yes Bank loan of ` 1,000 lakhs.
` 1,000 lakhs
towards the Company‟s
working capital
requirements (End Use)
Repayment of a
syndicated bank
loan of – `
13,333.33 lakhs
The syndicated
loan of ` 40,000
lakhs was utilized
towards
Repaying CPs
aggregating
` 25,500
lakhs;
capital
expenditure
of theatrical exhibition
business – `
14,500
lakhs
Please refer s. no. 1 to 6 of Table B regarding details of bank
loan facilities availed by the Company
Repayment of a
Canara Bank loan
of ` 12,500 lakhs
raised on September 28,
2010.
Repayment of
CPs issued to IFCI Limited of
` 2,500 lakhs on October 14, 2010
and July 16, 2010
` 414 lakhs towards capital
expenditure for
the Company‟s film production
services business.
98
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
(Net proceeds
from issue# – `
2,451.05)
(End Use)
` 94 lakhs
towards capital
expenditure for
the Company‟s
theatrical exhibition
business. (End
Use)
` 1,943.05 lakhs
towards the Company‟s
working capital
requirements (End Use)
Towards repaying
a loan of ` 10,000 lakhs availed
from Union Bank
on June 18, 2010. The loan was
repaid on October
18, 2010.
Towards repaying a
loan of ` 10,000 availed from
Syndicate Bank on
December 24, 2009. The loan was repaid
on June 24, 2010.
Towards repaying a
loan of ` 10,000 lakhs availed from
Allahabad Bank on January 9, 2009.
The loan was repaid
on January 8, 2010.
Refer note no 5
Repayment of a
Canara Bank loan
of ` 7,500 lakhs
raised on
November 15, 2010
Towards repaying
a CP of ` 4,000 lakhs –November
26, 2010 (LIC
Mutual Fund issued on August
30, 2010) (Net
proceeds from
issue# – `
3,926.17 lakhs)
` 168 lakhs –
Funding subsidiaries
towards their
capital expenditure and
working capital
requirements (End Use)
` 55 lakhs towards capital
expenditure for
the Company‟s
99
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
film production
services business.
(End Use)
` 3,703.17 lakhs
towards the
Company‟s working capital
requirements
(End Use)
Towards repaying
a short term loan
on December 2,
2010 – ` 1,500
lakhs – HDFC Bank Short term
loan , drawn on
September 3, 2010)
` 1,500 lakhs –
Funding subsidiaries towards their capital
expenditure and
working capital requirements (End
Use)
Towards repaying
a part of CPs on
December 3,
2010 – Used for
part payment of
CPs aggregating `
20,000 lakhs
(LIC Mutual
Fund ` 10,000
lakhs and LIC
Mutual Fund – `
10,000 lakhs
issued on January
29, 2010) (Net
proceeds from
Towards repaying
CPs of ` 2,500 lakhs
– Religare Mutual
Fund taken on
January 6, 2010 and
repaid on February
26, 2010
Towards partly
repaying a loan of
Allahabad Bank of ` 10,000 lakhs drawn
on January 9, 2009
Refer note no 5
Towards repaying
CPs of ` 5,000 lakhs
issued to JM Mutual
Fund on January 6, 2010 and repaid on
February 26, 2010
100
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
issue# - `
18,998.04 lakhs)
Towards party
repaying CPs of ` 17,500 lakhs partly
issued to LIC Mutual
Fund:
` 12,500 lakhs on
December 8, 2009 ; and
` 5,000 lakhs on December 14,
2009.
The CPs was repaid on March 8, 2010.
Towards
repaying the
following CPs
` 3,000 lakhs
- Religare Mutual Fund
– issued on
September 9, 2009
` 7,000 lakhs – JM Mutual
Fund – issued on September 9,
2009
` 2,500 lakhs
– Andhra
Bank – issued on September
9, 2009
towards partly repaying CPs
issued to
IDFC Limited
of ` 15,000
lakhs – raised on September
14, 2009 and
due on
December 14,
2009
CP‟s of Religare
Mutual Fund, JM
Mutual Fund and
Andhra Bank
were partly used
for funding of a CP Yes Bank
Limited – `
15,000 lakhs issued on April
29, 2009 and
repaid on September 9,
2009 (Net
proceeds from
issue# - `
14,562.24 lakhs) Refer note no 6
For details of utilization of
IDFC Limited
refer note no 7
Repayment of loan
of Yes Bank – `
3,000 lakhs
` 500 lakhs – Funding
subsidiaries
towards their capital
101
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
expenditure
and working
capital
requirements
(End Use)
` 2,500 lakhs towards the
Company‟s
working capital
requirements (End Use)
Repayment of loan
of Yes Bank – ` 1,500 lakhs
` 1,500 lakhs
towards the Company‟s
working capital
requirements (End Use)
– ` 1,006.67 lakhs
towards the Company‟s
working capital
requirements (End
Use)
5. Reliance
Capital
Limited
Inter
corporate
deposit facility
agreement
dated June 7, 2012
3,863.50 3,863.50 13.00%
p.a.
One year
from the date
of disbursement
On Demand Repayment of loan
of Syndicate Bank
– ` 937.50 lakhs
Refer utilization
given in Sr. No. 1
of Table A given for Syndicate
Bank repayment
of ` 937.50 lakhs
Repayment of loan
of Syndicate Bank
– ` 1,250 lakhs
Refer utilization
given in Sr. No. 1
of Table A given for Syndicate
Bank repayment
of ` 1,250 lakhs
102
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Repayment of an
installment of loan
from Union Bank
of India – ` 400
lakhs
` 400 lakhs was
expended towards
capital
expenditure for
the studio at Film
City, Mumbai. (End Use)
Funding
subsidiaries towards their
capital expenditure
and working capital
requirements – `
570.49 lakhs (End
Use)
` 705.51 lakhs
towards the
Company‟s working capital
requirements (End
Use)
6. Reliance
Capital
Limited
Inter
corporate
deposit facility
agreement
dated July 3, 2012
7,690.00 7,690.00 13.00%
p.a.
One year
from the date
of disbursement
On Demand Funding
subsidiaries
towards their capital expenditure
and working capital
requirements – ` 4,401.45 lakhs
(End Use)
` 3,288.55 lakhs towards the
Company‟s working capital
requirements (End
Use)
103
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
7. Reliance
Capital
Limited
Inter
corporate
deposit
facility
agreement
dated September
10, 2012
4,565.50 4,565.50 13.00%
p.a.
One year
from the date
of
disbursement
On Demand Funding
subsidiaries
towards their
capital expenditure
and working capital
requirements – ` 937.11 lakhs (End
Use)
Repayment of an installment of loan
from Union Bank
of India – ` 400 lakhs
` 400 lakhs was expended towards
capital
expenditure for the studio at Film
City, Mumbai.
(End Use)
Repayment of a
series of non-
convertible
debentures issue to
Barclays Bank PLC
– `550 lakhs
Adjustment of
amounts payable
under an interest
rate swap held by
the Company
converted into
Unsecured
Redeemable Non
- Convertible
Debentures (End
Use)
` 1,740.89 lakhs
towards the
Company‟s
working capital
requirements (End
Use)
104
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Towards repaying a
sum of ` 937.50
lakhs, an
installment of a
loan aggregating ` 15,000 lakhs
availed of from
Syndicate Bank –
Loan of ` 15,000
lakhs availed
from Syndicate
Bank on June 14,
2010
Towards repaying
loan of ` 10,000 lakhs
availed from Union
Bank of India and
drawn down on
December 15, 2009 and December 30,
2009. The loan was
repaid on June 15, 2010.
` 1,733 lakhs - Funding
subsidiaries
towards their capital
expenditure and
working capital requirements
(End Use)
` 209 lakhs towards capital
expenditure for the Company‟s
theatrical
exhibition business (End
Use).
` 1,066.90 lakhs towards capital
expenditure for the Company‟s
film production
services business. (End Use)
` 1,991.10 lakhs
towards the
Towards repaying a
secured loan of `
10,000 lakhs availed
from Syndicate
Bank on December
31, 2008. The loan was repaid on
December 30, 2009.
Refer note no 1
below
105
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
Company‟s
working capital
requirements
(End Use)
8. Reliance
Capital
Limited
Inter
corporate
deposit facility
agreement
dated October
25, 2012
3,238.00 3,238.00 13.00%
p.a.
One year
from the date
of disbursement
On Demand Funding
subsidiaries
towards their capital expenditure
and working capital
requirements – ` 329.17 lakhs (End
Use)
` 2,908.83 lakhs towards the
Company‟s working capital
requirements (End
Use)
9. Reliance Capital
Limited
Inter corporate
deposit facility
agreement
dated November
23, 2012
2,400.00 2,400.00 13.00% p.a.
One year from the date
of disbursement
On Demand Funding subsidiaries
towards their capital expenditure
and working capital
requirements – ` 331.77 lakhs (End
Use)
` 2,068.23 lakhs towards the
Company‟s
working capital requirements (End
Use)
10. Reliance Capital
Limited
Inter corporate
deposit
facility
3,500.00 3,500.00 13.00% p.a.
One year from the date
of
disbursement
On Demand Funding subsidiaries
towards their
capital expenditure
106
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
agreement
dated
November
23, 2012
and working capital
requirements – `
531.50 lakhs (End
Use)
Repayment of an
installment of loan from Union Bank
of India – ` 400
lakhs
` 400 lakhs was
expended towards capital
expenditure for
the studio at Film City, Mumbai.
(End Use)
Repayment of a
series of non-
convertible
debentures issue to
Barclays Bank PLC
– `550 lakhs
Adjustment of
amounts payable
under an interest
rate swap held by
the Company
converted into
Unsecured
Redeemable Non
- Convertible
Debentures (End
Use)
Towards repaying a
sum of ` 937.50 lakhs, an
installment of a
loan aggregating `
15,000 lakhs
availed of from Syndicate Bank –
Loan of ` 15,000 lakhs availed
from Syndicate
Bank on June 14,
2010
Towards repaying
loan of ` 10,000 lakhs availed from Union
Bank of India and
drawn down on
December 15, 2009
and December 30, 2009. The loan was
repaid on June 15,
2010.
` 1,733 lakhs -
Funding
Towards repaying a
secured loan of ` 10,000 lakhs availed
from Syndicate
Bank on December
31, 2008. The loan
was repaid on December 30, 2009.
Refer note 1
below
107
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
subsidiaries
towards their
capital
expenditure and
working capital
requirements (End Use)
` 209 lakhs
towards capital expenditure for
the Company‟s theatrical
exhibition
business (End
Use).
` 1,066.90 lakhs
towards capital expenditure for
the Company‟s
film production services business.
(End Use)
` 1,991.10 lakhs towards the
Company‟s working capital
requirements
(End Use)
` 1,081 lakhs
towards the
Company‟s working capital
requirements (End
Use)
108
Sr.
no. Name
of the
lenders
Nature of
borrowing Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
11. Reliance
Capital
Limited
Inter
corporate
deposit
facility
agreement
dated November
23, 2012
3,500.00 3,500.00 13.00%
p.a.
One year
from the date
of
disbursement
On Demand Funding
subsidiaries
towards their
capital expenditure
and working capital
requirements – ` 2,118.20 lakhs
(End Use)
` 1,381.80 lakhs towards the
Company‟s
working capital requirements (End
Use)
Table B: Loan facilities availed from various financial institutions, including banks and others
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
1 Allahabad Bank
June 27, 2012 Repayment of existing
commercial
paper and incurring
fresh capital
expenditure
5,000.00 1,666.67 13.25% - (SBPLR –
1.50%) p.a.
Syndicated loan of ` 40,000 lakhs was
used towards
repaying commercial
papers aggregating `
25,500 lakhs and towards capital
expenditure for the
Company‟s theatrical exhibition business –
Used for repayment of Commercial Papers (CP‟s) aggregating ` 25,500 lakhs in the matter set out below
CP issued to UTI Mutual Fund - ` 5,000 lakhs issued on December 28, 2007 and repaid
on March 26, 2008 (Net proceeds from issue# – ` 4,898.48 lakhs)
Subsequent traces
CP issued to Tata Mutual Fund – ` 5,000 lakhs issued on October 4, 2007 and repaid on
December 28, 2007 (Net proceeds from issue# – ` 4,907.65 lakhs)
2 Export
Import Bank
June 27, 2012
7,000.00 2,333.34
3 Jammu &
Kashmir Bank
June 27, 2012
7,000.00 2,333.34
4 Syndicate
Bank
June 27, 2012
7,000.00 2,333.34
109
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
5 Union
Bank of
India
June 27, 2012
6,000.00 2,000.00
` 14,500 lakhs (End
Use).
Subsequent traces
CP issued to ABN AMRO Mutual Fund – ` 5,000 lakhs issued on July 6, 2007 and repaid
on October 4, 2007 (Net proceeds from issue# – ` 4,903.87 lakhs)
Subsequent traces
` 4,903.87 lakhs was used to fund expansion of Radio business, which was demerged
from the Company effective April 1, 2008 pursuant to scheme of demerger approved by
the High Court of Judicature at Mumbai (End Use)
6 Vijaya Bank
June 27, 2012
8,000.00 2,666.67
Used for repayment of CP‟s
CP issued to UTI Mutual Fund – ` 5,000 lakhs issued on December 28, 2007 and repaid
on March 26, 2008 (Net proceeds from issue# – ` 4,898.48 lakhs)
Subsequent traces
CP issued to Kotak Mahindra Mutual Fund – ` 3,000 lakhs issued on October 3, 2007
and repaid on December 28, 2007 (Net proceeds from issue# – ` 2,943.82 lakhs) &
CP issued to Principal Mutual Fund – ` 2,000 lakhs issued on October 5, 2007 and repaid
on December 28, 2007 (Net proceeds from issue# – ` 1,964.07 lakhs)
Subsequent traces
CP issued to UTI Mutual Fund – ` 3,000 lakhs issued on July 5, 2007 and repaid on
October 3, 2007 (Net proceeds from issue# – ` 2,941.97 lakhs) &
CP issued to HSBC Mutual Fund – ` 2,000 lakhs issued on July 6, 2007 and repaid on
October 5, 2007 (Net proceeds from issue# – ` 1,961.37 lakhs)
Subsequent traces
` 4,903.34 lakhs was used to fund expansion of Radio business, which was demerged
110
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
from the Company effective April 1, 2008 pursuant to scheme of demerger approved by
the High Court of Judicature at Mumbai (End Use)
111
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
Used for repayment of CP‟s
CP issued to Sundaram BNP Paribas Mutual Fund – ` 3,000 lakhs issued on December
26, 2007 and repaid on March 26, 2008 (Net proceeds from issue# – ` 2,937.74 lakhs)
Subsequent traces
CP repaid to Sundaram BNP Paribas Mutual Fund - ` 3,000 lakhs issued on September
28, 2007 and repaid on December 26, 2007 (Net proceeds from issue# – ` 2,941.90 lakhs)
Subsequent traces
CP repaid to Sundaram BNP Paribas Mutual Fund – ` 3,000 lakhs issued on July 10,
2007 and repaid on September 28, 2007 (Net proceeds from issue# – ` 2,954.67 lakhs)
Subsequent traces
` 2,000 lakhs was used to fund expansion of Radio business, which was demerged from
the Company effective April 1, 2008 pursuant to scheme of demerger approved by the
High Court of Judicature at Mumbai (End Use)&
` 954.67 lakhs towards capital expenditure for the Company‟s theatrical exhibition business (End Use).
112
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
Used for repayment of CP‟s
CP issued to UTI Mutual Fund – ` 5,000 lakhs issued on December 26, 2007 and repaid
on March 26, 2008 (Net proceeds from issue# – ` 4,896.24 lakhs)
Subsequent traces
` 4,896.24 lakhs was used to fund expansion of Radio business, which was demerged
from the Company effective April 1, 2008 pursuant to scheme of demerger approved by
the High Court of Judicature at Mumbai (End Use)
Used for repayment of CP‟s
CP issued to Principal Mutual Fund – ` 7,500 lakhs issued on December 27, 2007 and
repaid on March 26, 2008 (Net proceeds from issue# – ` 7,342.85 lakhs)
Subsequent traces
` 2,662.68 lakhs was used to fund expansion of Radio business, which was demerged
from the Company effective April 1, 2008 pursuant to scheme of demerger approved by
the High Court of Judicature at Mumbai (End Use)
` 4,680.17 lakhs towards capital expenditure for the Company‟s theatrical exhibition
business (End Use).
7 Union
Bank of India
Term loan
agreement dated January 29, 2010
and review letter dated January 18,
2010 as modified by
the sanction letter
For
financing the
Company‟s Studio
project in
Mumbai 8,000.00 4,400.00
Base Rate +
3.50% p.a.
Capital expenditure
towards studio at Film City, Mumbai
(End Use).
113
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
dated February 9,
2010
8 Syndicate
Bank
General Agreement
dated June 11, 2010 and the sanction
letter dated May 31,
2010 as supplemented by
letter dated July 18,
2011
For
augmenting long term
working
capital requirement
15,000.00 9,375.00
Base Rate +
2.50% p.a.
Loan of ` 15,000
lakhs was drawn on
1June 4, 2010
` 10,000 lakhs used to repay
loan of ` 10,000 lakhs
availed from Union Bank of
India on December 15, 2009 and December 30, 2009. The
loan was repaid on June 15,
2010
Repayment of a secured loan of ` 10,000
lakhs availed from Syndicate Bank
repaid on December 30, 2009. The loan
was availed on December 31, 2008.
Refer note 1
below
` 1,733 lakhs –
Funding subsidiaries
towards their capital expenditure and
working capital requirements (End
Use)
` 209 lakhs towards capital expenditure for
the Company‟s
theatrical exhibition business. (End Use)
` 1,066.90 towards capital expenditure for
the Company‟s film
production services business. (End Use)
` 1,991.10 lakhs
towards the Company‟s
working capital
requirements (End
Use)
114
Sr.
No.
Name of
the
lender
Nature and date of
the loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at
January
31, 2013
(in `
lakhs)
Amount
outstanding
as at
January 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level
utilization of loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
9 Syndicate
Bank
General agreement
dated June 10, 2011
and sanction letter
dated June 6, 2011
Long term
working
capital
10,000.00 10,000.00
Base rate +
1% p.a.
Loan was drawn on
13 June 2011 and
used for part
repayment of CPs
issued to Franklin
Templeton
aggregating `22,500
lakhs, drawn on
December 28, 2010 and repaid on June
15, 2011. (Net
proceeds from issue#
– ` 21,339.07
lakhs)
CP of Franklin Templeton
raised on December 28,
2010 was used for
repayment of a CP of `
20,000 lakhs raised from
LIC Mutual Fund issued on
March 9, 2010 – ` 5,000
lakhs and March 15, 2010 –
` 15,000 lakhs. The CP was
repaid on December 29,
2010 (Net proceeds from
issue# – ` 18,908.92
lakhs)
CP of LIC Mutual Fund was used for the
repayment of CPs of ` 17,500 lakhs
issued from LIC Mutual Fund on
December 14, 2009 and repaid on March
26, 2010
Refer note 2
below
Funding subsidiaries towards their
capital expenditure and working capital
requirements – ` 1,408.92 lakhs (End
Use)
` 1,339.07 lakhs towards the
Company‟s working capital
requirements (End Use).
10 Barclays
Bank
PLC
Unsecured
Redeemable Non -
Convertible Debentures
4,400.00 3,300.00
12.50% p.a.,
compounded
monthly, payable
quarterly in
arrears
Series A –
September 18, 2012
Series B – December 10, 2012
Series C – March 10,
2013 Series D – June 10,
2013
Series E – September 10, 2013
Series F – December
10, 2013 Series G – March 10,
2014
Series H – June 10, 2014
Series A – September 18,
2012 – ` 550.00
Series B – December 10,
2012 - ` 550.00
Series C – March 10, 2013 -
` 550.00
Series D – June 10, 2013 - ` 550.00
Series E – September 10,
2013 - ` 550.00 Series F – December 10,
2013 - ` 550.00 Series G – March 10, 2014 -
` 550.00
Series H – June 10, 2014 - ` 550.00
Adjustment of amounts payable under an
interest rate swap held by the Company
converted into Unsecured Redeemable Non - Convertible Debentures (End
Use)
115
Table C: Unsecured inter-corporate deposits - Others
Sr.
no.
Name
of the
lenders
Nature of
borrowing
Amount
sanctioned
(In `
lakhs)
Principal
amount
outstanding
as at
January 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent
traces
Subsequent traces -
1
Subsequent traces
– 2
1. Magma
Fin Corp
Ltd
Inter
corporate deposit
facility
agreement dated
March 26,
2012
2,200.00 2,200.00 12.00%
p.a.
6 months
from date of drawl
On Demand Repayment of an
installment of loan from Union Bank of
India – ` 400 lakhs
` 400 lakhs was
expended towards
capital
expenditure for the studio at Film
City, Mumbai (End Use).
` 383 lakhs -
Funding subsidiaries towards
their capital
expenditure and
working capital
requirements (End
Use)
` 1,417 lakhs. towards the
Company‟s working capital
requirements (End
Use)
2. Magma Fin
Corp
Ltd
Inter corporate
deposit facility
agreement
dated April 30, 2012
1,300.00 1,300.00 12.00% p.a.
6 months from date
of drawl
On Demand ` 1,300 lakhs towards the
Company‟s working capital
requirements (End
Use)
# - The CP‟s have been issued at a discount to face value
116
Note no. 1
Syndicate Bank loan availed on December 31, 2008 and repaid on December 30, 2009, used for repayment of
a. Non-convertible debentures issued to Canara Robecco Mutual Fund – ` 5,000 lakhs – issued on November 21,
2008 and repaid on January 9, 2009
Subsequent traces
Repayment of CP of JM Financial Mutual Fund of `5,000 lakhs issued on November 6, 2008 and repaid on November
21, 2008 (Net proceeds from issue# - `4,969.37 lakhs)
Subsequent traces
Part repayment of a CP of JM Financial Mutual Fund - `10,000 lakhs issued on September 19, 2008 and repaid on
November 6, 2008 (Net proceeds from issue# - `9,844.64 lakhs)
Subsequent traces
Used for repayment of 3 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Birla Sunlife Trustee
Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01
ABN AMRO Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Subsequent traces
Used for repayment of 4 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Principal Mutual
Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Principal Mutual
Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
HDFC Standard Life
Insurance Company 2,500.00 May 20, 2008 August 20, 2008 2,446.66
ABN AMRO Mutual
Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Subsequent traces
Used for repayment of 3CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
LIC Mutual Fund 2,000.00 February 20, 2008 May 20, 2008 1,950.70
ABN AMRO 5,000.00 February 20, 2008 May 20, 2008 4,876.75
117
Mutual Fund
Lotus India Mutual
Fund 2,000.00 February 20, 2008 May 20, 2008 1,950.70
And
` 786.64 lakhs towards the Company‟s working capital requirements (End Use)
Subsequent traces
Used for part repayment of 2 CP‟s
Issuer Amount (` in
lakhs)
Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Principal Mutual
Fund 5,000.00 November 20, 2007 February 20, 2008 4,892.11
Birla Sunlife Trustee
Company Limited 4,500.00 November 20, 2007 February 20, 2008 4,402.89
Subsequent traces
Part repayment of a CP from UTI Bank Limited – ` 12,000 lakhs raised on August 22, 2007 and repaid on November 20,
2007 (Net proceeds from issue# - ` 11,764.45 lakhs)
Subsequent traces
Repayment of a CP from UTI Bank Limited – ` 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007
(Net proceeds from issue# - ` 11,715.46 lakhs)
Subsequent traces
` 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April
1, 2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 1,094.16 lakhs towards capital expenditure for the Company‟s production and distribution business. (End Use)
b. Part repayment of a CP of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid on
February 3, 2009 (Net proceeds from issue# - ` 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ` 22,500 lakhs issued on October 24, 2008 and repaid on December
5, 2008 (Net proceeds from issue# - ` 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
118
Canara Robecco
Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra
Mutual Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco
Mutual Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Subsequent traces
Used for repayment of 2 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO
Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco
Mutual Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 8.500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset
Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahabad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual
Fund 4,500.00 June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Allahabad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual
Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative
Bank Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance 2,500.00 March 4, 2008 June 4, 2008 2,438.87
119
Company Limited
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual
Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual
Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra
Mutual Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
And
` 1,938.84 lakhs towards the Company‟s working capital requirements
Subsequent traces
` 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1,
2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 11,353.84 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
120
Note no. 2
LIC Mutual Fund (through 2 CP‟s) - ` 17,500 lakhs raised on December 14, 2009 and repaid on March 26, 2010 (Net
proceeds from issue# - ` 17,323.30 lakhs)
Subsequent traces
Part repayment of 2 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
IDFC Limited 15,000.00 September 14, 2009 December 14, 2009 14,706.67
Yes Bank Limited 7,500.00 September 14, 2009 December 14, 2009 7.359.63
Subsequent traces
Part repayment of 5 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in
lakhs)
Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Indian Overseas
Bank 1,000.00 December 17, 2008 March 17, 2009 966.63
Federal Bank 2,500.00 December 17, 2008 March 17, 2009 2,416.58
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
And
` 234.75 lakhs towards the Company‟s working capital requirements
Subsequent traces
Used for repayment of 4 CP‟s
Issuer Amount (` in
lakhs)
Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
121
Issuer Amount (` in
lakhs)
Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Canara Robecco
Mutual Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Kotak Mahindra
Mutual Fund 5,000.00 September 19, 2008 December 19, 2008 4,845.96
JP Morgan Mutual
Fund 3,000.00 December 5, 2008 December 30, 2008 2,969.49
And
Repayment of a non-convertible debenture issued to Canara Robecco Mutual Fund – ` 5,000 lakhs issued on November
21, 2008 and repaid on December 30, 2008
And
` 2,716.53 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
And
` 2,058.88 lakhs towards the Company‟s working capital requirements (End Use)
Subsequent traces
Part repayment of 7 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
STCI Primary Dealer
Limited 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Birla Sunlife Trustee
Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01
ABN AMRO Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Kotak Mahindra
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
And
Repayment of a CP of JP Morgan Mutual Fund – ` 3,000 lakhs issued on November 6, 2008 and repaid on December 5,
2008 (Net proceeds from issue# - ` 2,964.67 lakhs)
Subsequent traces
Repayment of a CP of JP Morgan Mutual Fund – ` 3,000 lakhs issued on September 19, 2008 and repaid on November 6,
2008 (Net proceeds from issue# - ` 2,953.39 lakhs)
(This CP was repaid along with the 7 CP‟s included above)
Subsequent traces
Used for repayment of 6 CP‟s
122
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
HDFC Standard Life
Insurance Co. Ltd. 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Sundaram BNP
Paribas Mutual Fund 1,000.00 May 20, 2008 August 20, 2008 978.66
ABN AMRO Mutual
Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Birla Sunlife
Insurance Company
Limited 1,000.00 May 20, 2008 August 20, 2008 978.66
And
Used for repayment of 2 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Birla Sunlife
Insurance Company
Limited 5,500.00 February 20, 2008 August 20, 2008 5,238.78
Kotak Mahindra
Mutual Fund 2,500.00 February 20, 2008 August 20, 2008 2,381.26
Subsequent traces
CP‟s of `12,000 lakhs
` 8,878.31 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 2,865.65 lakhs towards the Company‟s working capital requirements (End Use)
CP‟s of `8,000 lakhs
Repayment of a CP of Lotus India Mutual Fund – ` 2,500 lakhs issued on November 20, 2007 and repaid on February
20, 2008 (Net proceeds from issue# - ` 2,446.05 lakhs)
And
` 5,120.04 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
And
CP of ` 2,500 lakhs was used for part repayment of a CP of UTI Bank Limited – ` 12,000 lakhs – issued on August 22,
2007 and repaid on November 20, 2007 (Net proceeds from issue# - ` 11,764.45 lakhs)
Subsequent traces
Part repayment of a CP from UTI Bank Limited – ` 12,000 lakhs raised on August 22, 2007 and repaid on November 20,
2007 (Net proceeds from issue# - ` 11,764.45 lakhs)
Subsequent traces
Repayment of a CP from UTI Bank Limited – ` 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007
(Net proceeds from issue# - ` 11,715.46 lakhs)
123
Subsequent traces
` 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April
1, 2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 1,094.16 lakhs towards capital expenditure for the Company‟s production and distribution business. (End Use)
124
Note no. 3
CP raised from IFCI Limited - ` 2,500 lakhs issued on March 4, 2010 and repaid on June 4, 2010 (Net proceeds from
issue# - ` 2,452.10 lakhs)
Subsequent traces
Repayment of a CP of LIC Mutual Fund – ` 2,500 lakhs issued on December 8, 2009 and repaid on March 7, 2010 (Net
proceeds from issue# - ` 2,477.70 lakhs)
Subsequent traces
Repayment of a CP of Andhra Bank – ` 2,500 lakhs issued on September 9, 2009 and repaid on December 8, 2009 (Net
proceeds from issue# - ` 2,457.58 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ` 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009
(Net proceeds from issue# - ` 14,562.24 lakhs)
Subsequent traces
Repayment of a CP of Yes Bank Limited – ` 15,000 lakhs issued on February 3, 2009 and repaid on April 30, 2009 (Net
proceeds from issue# - ` 14,663.15 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid on February 3,
2009 (Net proceeds from issue# - ` 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ` 22,500 lakhs issued on October 24, 2008 and repaid on December
5, 2008 (Net proceeds from issue# - ` 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco
Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra
Mutual Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco
Mutual Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Subsequent traces
Used for repayment of 2 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
125
issue# (` in lakhs)
ABN AMRO
Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco
Mutual Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 8,500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset
Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahabad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual
Fund 4,500.00 June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Allahabad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual
Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative
Bank Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance
Company Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual
Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
126
Principal Mutual
Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra
Mutual Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
And
` 1,938.84 lakhs towards the Company‟s working capital requirements
Subsequent traces
` 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1,
2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 11,353.84 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
127
Note no. 4
CPs of ` 2,500 lakhs and ` 1,500 lakhs raised on November 25, 2009 and November 30, 2009, respectively, from JM
Mutual Fund. The CPs were repaid on May 25, 2010 (Net proceeds from issue # ` 2,424.26 lakhs and ` 1,455.78 lakhs
respectively)
Subsequent traces
` 2,380.04 lakhs towards capital expenditure for the Company‟s film production services business. (End Use)
And
Repayment of a CP of JM Mutual Fund – ` 1,500 lakhs issued on September 1, 2009 and repaid on November 30, 2009
(Net proceeds from issue# - ` 1,474.55 lakhs)
Subsequent traces
` 1,474.55 lakhs towards capital expenditure for the Company‟s film production services business. (End Use)
128
Note no. 5
Towards repaying a loan of ` 10,000 lakhs availed from Allahabad Bank on January 9, 2009. The loan was repaid on
January 8, 2010
Subsequent traces
Part repayment of a CP of ` 22,500 lakhs of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid
on February 3, 2009 (Net proceeds from issue# - ` 22,011.52 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid on February 3,
2009 (Net proceeds from issue# - ` 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ` 22,500 lakhs issued on October 24, 2009 and repaid on December
5, 2009 (Net proceeds from issue# - ` 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco
Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra
Mutual Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco
Mutual Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Subsequent traces
Used for repayment of 2 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO
Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco
Mutual Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual 8,500.00 June 4, 2008 September 1, 2008 8,315.88
129
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Fund
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset
Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahbad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual
Fund 4,500.00 June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Allahbad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual
Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative
Bank Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance
Company Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual
Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual
Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra
Mutual Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
And
` 1,938.84 lakhs towards the Company‟s working capital requirements
Subsequent traces
130
` 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1,
2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 11,353.84 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
131
Note no. 6
CP‟s of Religare Mutual Fund, JM Mutual Fund and Andhra Bank were partly used for funding of a CP Yes Bank
Limited – ` 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# - `
14,562.24 lakhs)
CP of Religare Mutual Fund – ` 3,000 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net
proceeds from issue# - ` 2,949.10 lakhs)
And
CP of JM Mutual Fund - ` 7,000 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds
from issue# - ` 6,881.23 lakhs)
And
CP of Andhra Bank - ` 2,500 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds
from issue# - ` 2,457.58 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ` 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009
(Net proceeds from issue# - ` 14,562.24 lakhs)
Subsequent traces
Repayment of a CP of Yes Bank Limited – ` 15,000 lakhs issued on February 3, 2009 and repaid on 30 April 2009 (Net
proceeds from issue# - ` 14,663.15 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid on February 3,
2009 (Net proceeds from issue# - ` 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ` 22,500 lakhs issued on October 24, 2008 and repaid on December
5, 2008 (Net proceeds from issue# - ` 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco
Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra
Mutual Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco
Mutual Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Subsequent traces
Used for repayment of 2 CP‟s
132
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO
Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco
Mutual Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 8.500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual
Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset
Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahbad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual
Fund 4,500.00 June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Allahbad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual
Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative
Bank Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance
Company Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual
Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
133
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual
Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra
Mutual Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
` 1,938.84 lakhs towards the Company‟s working capital requirements
Subsequent traces
` 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1,
2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 11,353.84 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
134
Note no. 7
CP of IDFC Limited - ` 15,000 lakhs issued on September 14, 2009 and repaid on December 14, 2009 (Net proceeds
from issue# - ` 14,706.67 lakhs)
Subsequent traces
Part repayment of 5 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in
lakhs)
Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Indian Overseas
Bank 1,000.00 December 17, 2008 March 17, 2009 966.63
Federal Bank 2,500.00 December 17, 2008 March 17, 2009 2,416.58
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
And
` 234.75 lakhs towards the Company‟s working capital requirements
Subsequent traces
Used for repayment of 4 CP‟s
Issuer Amount (` in
lakhs)
Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Canara Robecco
Mutual Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Kotak Mahindra
Mutual Fund 5,000.00 September 19, 2008 December 19, 2008 4,845.96
JP Morgan Mutual
Fund 3,000.00 December 5, 2008 December 30, 2008 2,969.49
And
135
Repayment of a non-convertible debenture issued to Canara Robecco Mutual Fund – ` 5,000 lakhs issued on November
21, 2008 and repaid on December 30, 2008
` 2,716.53 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
And
` 2,058.88 lakhs towards the Company‟s working capital requirements (End Use)
Subsequent traces
Part repayment of 7 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
ABN AMRO Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
STCI Primary Dealer
Limited 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Birla Sunlife Trustee
Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01
ABN AMRO Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Kotak Mahindra
Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
And
Repayment of a CP of JP Morgan Mutual Fund – ` 3,000 lakhs issued on November 6, 2008 and repaid on December 5,
2008 (Net proceeds from issue# - ` 2,964.67 lakhs)
Subsequent traces
Repayment of a CP of JP Morgan Mutual Fund – ` 3,000 lakhs issued on September 19, 2008 and repaid on November 6,
2008 (Net proceeds from issue# - ` 2,953.39 lakhs)
(This CP was repaid along with the 7 CP‟s included above)
Subsequent traces
Used for repayment of 6 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
HDFC Standard Life
Insurance Co. Ltd. 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Sundaram BNP
Paribas Mutual Fund 1,000.00 May 20, 2008 August 20, 2008 978.66
136
ABN AMRO Mutual
Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Birla Sunlife
Insurance Company
Limited 1,000.00 May 20, 2008 August 20, 2008 978.66
And
Used for repayment of 2 CP‟s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from
issue# (` in lakhs)
Birla Sunlife
Insurance Company
Limited 5,500.00 February 20, 2008 August 20, 2008 5,238.78
Kotak Mahindra
Mutual Fund 2,500.00 February 20, 2008 August 20, 2008 2,381.26
Subsequent traces
CP‟s of ` 12,000 lakhs
` 8,878.31 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 2,865.65 lakhs towards the Company‟s working capital requirements (End Use)
CP‟s of ` 8,000 lakhs
Repayment of a CP of Lotus India Mutual Fund – ` 2,500 lakhs issued on 20 November 2007 and repaid on February 20,
2008 (Net proceeds from issue# - ` 2,446.05 lakhs)
And
` 5,120.04 lakhs towards capital expenditure for the Company‟s theatrical exhibition business. (End Use)
CP of ` 2,500 lakhs was used for part repayment of a CP of UTI Bank Limited – ` 12,000 lakhs – issued on August 22,
2007 and repaid on 20 November 2007 (Net proceeds from issue# - ` 11,764.45 lakhs)
Subsequent traces
Part repayment of a CP from UTI Bank Limited – ` 12,000 lakhs raised on August 22, 2007 and repaid on 20 November
2007 (Net proceeds from issue# - ` 11,764.45 lakhs)
Subsequent traces
Repayment of a CP from UTI Bank Limited – ` 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007
(Net proceeds from issue# - ` 11,715.46 lakhs)
Subsequent traces
` 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April
1, 2008 pursuant to scheme of demerger approved by the High Court of Judicature at Mumbai (End Use)
And
` 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
` 1,094.16 lakhs towards capital expenditure for the Company‟s production and distribution business. (End Use)
137
For further details regarding our indebtedness, please see the chapter entitled “Financial Indebtedness” beginning at page
254 of this Draft Letter of Offer.
138
3. General Corporate Purposes
Our Company intends to deploy the balance Net Proceeds aggregating ` [●] lakhs for general corporate
purposes, including but not restricted to, future growth requirements, strategic initiatives, partnerships,
joint ventures and acquisitions, meeting exigencies which our Company in ordinary course of business
may face, or any other purposes as may be approved by the Board of Directors.
4. Issue related expenses
The Issue related expenses include, among others, fees to various advisors, printing and distribution
expenses, advertisement expenses, and registrar‟s fees. The estimated Issue related expenses are as
follows:
Activity Expense
(` in
lakhs)
Expense (% of
total expenses)
Expense (% of
Issue Size)
Fee to the Lead Manager [●] [●] [●]
Fee to the Registrar to the Issue [●] [●] [●]
Fee to the Monitoring Agency and Legal Advisors [●] [●] [●]
Others (SEBI Fees, Stock Exchange Fees, Printing,
Stationery and Postage, Advertisement, etc)
[●] [●] [●]
Total estimated Issue expenses [●] [●] [●]
Interim use of proceeds
The management of our Company, in accordance with the policies formulated by it from time to time, will
have flexibility in deploying the Net Proceeds received from the Issue. Pending utilization of the Issue
Proceeds for the purposes described above, our Company intends to temporarily invest the funds in interest
bearing liquid instruments including investments in mutual funds and other financial products, such as
principal protected funds, derivative linked debt instruments, other fixed and variable return instruments,
listed debt instruments, rated debentures or deposits with banks as may be approved by our Board of
Directors. Such investments would be in accordance with the investment policies approved by our Board of
Directors from time to time.
Bridge Financing Facilities
Our Company has not raised any bridge loans from any bank or financial institution as on the date of this
Draft Letter of Offer, which are proposed to be repaid from the Net Proceeds.
Monitoring of Utilisation of Funds
In terms of Regulation 16 of the ICDR Regulations we are required to appoint a monitoring agency since the
Issue size is in excess of `50,000 lakhs. We have, thus far, not appointed a Monitoring Agency and will
appoint a Monitoring Agency prior to filing the Letter of Offer. The Monitoring Agency will monitor the
utilisation of Issue Proceeds.
Pursuant to clause 49 of the Listing Agreement, our Company shall on a quarterly basis disclose to the Audit
Committee the uses and applications of the Issue Proceeds. The Audit Committee shall review the report
submitted by the Monitoring Agency and make recommendations to our Board of Directors for further
action, if appropriate. Our Company shall, on an annual basis, prepare a statement of funds utilised for
purposes other than those stated in this Draft Letter of Offer and place it before the Audit Committee. Such
disclosure shall be made only until such time that all the Issue Proceeds have been utilised in full. The
statement shall be certified by the statutory auditors of our Company.
139
Further, in accordance with clause 43A of the Listing Agreement, our Company will furnish a statement to
the Stock Exchanges on a quarterly basis a statement on indicating material deviations, if any, in the
utilisation of the Net Proceeds of the Issue. This information will also be published in newspapers
simultaneously / along with the interim or annual financial results, after placing the same before the Audit
Committee. Further, our Company will also inform the Stock Exchanges of deviations, if any, in the
utilisation of Net Proceeds of the Issue, pointed out by the Monitoring Agency, after review by our Audit
Committee and also publish the same in the newspapers.
Our Company proposes to utilise the Net Proceeds to repay certain loans availed by our Company from our
Promoter and related entities, as mentioned in this chapter entitled “Objects of the Issue”. Other than as
mentioned in this section, no part of the Issue Proceeds will be paid by our Company as consideration to our
Promoters, our Board of Directors, our Company‟s key management personnel or companies promoted by
our Promoters, except in the usual course of business.
140
BASIS FOR ISSUE PRICE
You should read the following summary with the chapter entitled “Risk Factors” at page 11 and the more
detailed information about us and the restated financial statements included in this Draft Letter of Offer at
page F1.
The face value of each Equity Share is `5/- and the Issue Price is [●] times the face value of each Equity
Share.
Qualitative Factors
We believe we have the following competitive strengths:
1. Strong reputation and brand in the E&M sector;
2. Demonstrated ability to expand our operations both organically and inorganically;
3. Presence across various E&M businesses and geographies;
4. Our technological capabilities; and
5. The Reliance Group‟s brand, experience and position in India and overseas.
For further details regarding some of the qualitative factors which form the basis for computing the Issue
Price please see the chapters entitled “Business” and “Risk Factors” at pages 165 and 11, respectively.
Quantitative Factors
Information presented in this section is derived from our standalone and consolidated restated financial
statements prepared in accordance with Indian GAAP, Companies Act and the ICDR Regulations. Some of
the quantitative factors which form the basis for computing Issue Price are as follows:
1. Basic Earnings Per Share (EPS) and Diluted Earnings Per Share (EPS)
Particulars Basic EPS (in `) Diluted EPS (in `)
Weight Standalone Consolidated Standalone Consolidated
Fiscal 2010 (19.07) (27.89) (19.07) (27.89) 1
Fiscal 2011 (52.79) (71.26) (52.79) (71.26) 2
Fiscal 2012 (152.53) (197.43) (152.53) (197.43) 3
Weighted Average (97.04) (127.12) (97.04) (127.12)
Note:
(1) The face value of Equity Share is `5/-; and
(2) Earnings per share calculations are done in accordance with AS 20 „Earnings per Share‟ issued by the ICAI.
2. Price/Earning (P/E) ratio in relation to Issue Price of ` [●] per Equity Share
Sr. No. Particulars Standalone Consolidated
a. P/E ratio based on Basic EPS for Fiscal
2011 at the Issue Price
Cannot be computed
as EPS for Fiscal
2011 is negative
Cannot be computed as
EPS for Fiscal 2011 is
negative
141
Sr. No. Particulars Standalone Consolidated
b. P/E ratio based on Diluted EPS for Fiscal
2011 at the Issue Price
Cannot be computed
as EPS for Fiscal
2011 is negative
Cannot be computed as
EPS for Fiscal 2011 is
negative
c. P/E ratio based on Basic EPS for Fiscal
2012 at the Issue Price
Cannot be computed
as EPS for Fiscal
2012 is negative
Cannot be computed as
EPS for Fiscal 2012 is
negative
d. P/E ratio based on Diluted EPS for Fiscal
2012 at the Issue Price
Cannot be computed
as EPS for Fiscal
2012 is negative
Cannot be computed as
EPS for Fiscal 2012 is
negative
Peer Group P/ E*
Particulars P/ E Ratio
Highest T.V. Today Network Limited. - 31.7
Lowest Mukta Arts Limited - 2.3
Average 16.6#
* P/E based on trailing twelve months earnings for the entire Entertainment/Electronic Media Software sector.
# Industry composite
Source: Capital Markets, Vol. XXVII/08, Jun 11 – 24, 2012
3. Return on Net worth (“RoNW”)
Particulars RoNW (%) Weight
Standalone Consolidated
Fiscal 2010 (21.21)% (35.95)% 1
Fiscal 2011 (144.88)% (1,235.56)% 2
Fiscal 2012(1)
NA NA 3
Weighted Average (103.66)% (835.69)% Note: Net worth as appearing in the restated audited standalone and consolidated summary statement of assets and
liabilities for the respective period has been considered for RoNW. (1) RoNW for Fiscal 2012 cannot be computed as our net worth as per the consolidated and standalone restated financial
statements is negative.
4. Minimum Return on Increased Net Worth Required to Maintain pre-Issue EPS as of March 31,
2012:
(a) Based on Basic EPS
Based on standalone restated financial statements: Cannot be computed as EPS is negative; and
Based on consolidated restated financial statements: Cannot be computed as EPS is negative.
(b) Based on Diluted EPS:
Based on standalone restated financial statements: Cannot be computed as EPS is negative; and
Based on consolidated restated financial statements: Cannot be computed as EPS is negative.
5. Net Asset Value per share
NAV (`)
Standalone Consolidated
NAV per Equity Share as at September 30, 2012 (44.66) (126.39)
NAV per Equity Share after the Issue [●] [●]
Issue Price [●] [●]
142
NAV per Equity Share = Net worth, as restated, at the end of the period/year (excluding preference share
capital and premium)/ Number of equity shares outstanding at the end of the period.
6. Comparison with Industry Peers:
Name of
the
Company
Standalon
e/
Consolidat
ed
12 months
ended
March, 2012 /
Year ended
Face
Value (`)
For Fiscal 2012 / 12 month period ended
March 31, 2012
Basic
EPS (`) P/E
(1) RONW (%) NAV
Reliance
MediaWork
s Limited
Stand-alone Fiscal 2012(2)
5/- (152.53) NA NA (44.66)
Peer
Group*
Fame India
Limited Stand-alone
Year ended
March 31,
2012
10/- (3.00) NA 6.91% 29.14
Inox
Leisure
Limited
Stand-alone
Year ended
March 31,
2012
10/- 1.67 30.72 3.13% 53.04
PVR
Limited Stand-alone
Year ended
March 31,
2012
10/- 10.50 14.04 9.81% 110.41
*Source: As per audited standalone financial statement
Note: The peer group listed companies, as stated above are engaged in the Entertainment/Electronic Media Software
sector. (1) Computed based on market price as on March 31, 2012 on NSE.
Note: Fiscal 2012 represents eighteen months ended Septembem 30, 2012.
On the basis of the above qualitative and quantitative parameters and the current market price of the equity
shares of the Company, our Company, in consultation with the Lead Manager, is of the opinion that the Issue
Price of ` [●] per Equity Share is justified. For further details, please see the chapter entitled “Risk Factors”
at page 11 and our financials including important profitability and return ratios, as set out in the chapter
entitled “Financial Statements” at page F1.
143
To,
The Board of Directors,
Reliance MediaWorks Limited
Filmcity Complex,
Goregaon (East)
Mumbai - 400065
STATEMENT OF TAX BENEFITS
We hereby report that the enclosed statement, prepared by Reliance MediaWorks Limited (formerly Adlabs
Films Limited) (hereinafter referred to as the “Issuer”), states the possible tax benefits available to the Issuer
and its members under the provisions of the Income Tax Act, 1961, Wealth Tax Act, 1957 and Gift Tax Act,
1958 presently in force in India. The benefits as stated are dependent on the Company or its shareholders
fulfilling the conditions prescribed under the relevant tax laws. Hence the ability of the Company or its
shareholders to derive the tax benefits is dependent upon fulfilling such conditions.
The benefits discussed in the enclosed annexure are not exhaustive. This statement is only intended to
provide general information to the investors and is neither designed nor intended to be a substitute for
professional advice. In view of the individual nature of the tax consequences and the changing tax laws each
investor is advised to consult his or her own tax consultant with respect to the specific tax implications
arising out of their participation in the issue.
We do not express any opinion or provide any assurance as to whether:
i) the Issuer or its members will continue to obtain these benefits in future; or
ii) the conditions prescribed for availing the benefits, where applicable have been / would be met
The contents of the enclosed statement are based on the information, explanations and representations
obtained from the Issuer and on the basis of the understanding of the business activities and operations of the
Issuer and the interpretation of the current tax laws in force in India.
For JITENDRA SANGHAVI & CO.
CHARTERED ACCOUNTANTS.
PLACE: MUMBAI (J.B. SANGHAVI)
Date: 26.02.2012 PARTNER
Membership No.30127
Firm Reg.No.104299W
144
TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS
The tax benefits listed below are the possible benefits available under the Income Tax Act, 1961 and the
Wealth Tax Act, 1957, presently in force in India. Several of these benefits are dependent on the Issuer or its
members fulfilling the conditions prescribed under the relevant provisions of the respective tax laws. Hence,
the ability of the Issuer or its members to derive the tax benefits is dependent upon fulfilling such conditions,
which based on the business imperatives, the Issuer may or may not choose to fulfill.
The benefits discussed below are not exhaustive. This statement is only intended to provide general
information to the investors and is neither designed nor intended to be a substitute for professional tax
advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is
advised to consider in his / her own case the tax implications of an investment in the shares. Further each
investor is advised to consult his or her own tax consultant with respect to the specific tax implications
arising out of their participation in the issue.
I. Tax Benefits available to the Issuer - under the Income Tax Act, 1961 (the Act)
A. Special Tax Benefits
The Issuer does not enjoy any special tax benefits
B. General Tax Benefits
1. Depreciation Benefits
Under section 32 of the Act, the Issuer is entitled to claim depreciation at the prescribed rates on
specified tangible and intangible assets used by the Issuer for the purposes of its business and
subject to other conditions listed in the Act.
Unabsorbed depreciation, if any, for an assessment year can be carried forward and set off against
income from any other source in the subsequent assessment years as per section 32 subject to the
provisions of section 72(2) and section 73(3) of the Act.
2. Minimum Alternate Tax (MAT) and Credit for the same
The Issuer would be required to pay tax on its book profits under the provisions of section 115JB in
case where tax on its “total income” (the term defined under section 2(45) of the Act) is less than
18.50%(plus applicable education cess and also a surcharge in case book profit exceeds `100 lakhs)
of its “book profits” (the term defined under section 115JB of the Act). Such tax is referred to as
Minimum Alternate Tax (MAT).
The difference between the MAT paid for any assessment year commencing on or after April 1,
2006 and the tax on its total income payable for that assessment year shall be allowed to be carried
forward as “MAT credit”. The MAT credit shall be utilised to be set off against taxes payable on the
total income in the subsequent assessment years. However, it can be carried forward only upto 10
assessment years succeeding the assessment year in which such MAT was paid.
3. Exemption from Dividends and Income from units of Specified Mutual Funds
Section 10(34) of the Act provides an exemption in respect of any income by way of dividends
referred to in section 115-O (whether interim or final). Dividends referred to in section 115-O
would cover dividends declared, distributed or paid by the domestic companies in respect of which
the distributing company is liable to pay dividend distribution tax. Similarly the income received
from units of a Mutual Fund specified under section 10(23D) is exempt from tax. Such income
145
distributed by the Mutual Fund or the Administrator of the specified undertaking would also be
subject to applicable dividend distribution tax, except when the distribution is made by an open
ended “equity oriented fund”. It may be pertinent to note that section 14A of the Act restricts claim
for deduction of expenses incurred in relation to exempt income.
4. Dividend Distribution tax
Dividends declared / distributed / paid by the Issuer is subject to dividend distribution tax at 15 per
cent (plus applicable surcharge and education cess). As per Section 115O (1A), for the purpose of
calculating dividend distribution tax, the aforesaid amount of dividend shall be reduced by the
amount received by the Issuer from its subsidiaries by way of dividend during the financial year
provided the subsidiaries have paid dividend distribution tax.
5. Concessional rate of tax on Dividend from Foreign subsidiaries.
Dividend received by an Indian holding company from its foreign subsidiaries will be taxed at
concessional rate of tax at 15 per cent under Section 115BBD.
6. Capital Gains
(a) Under section 112 of the Act, long term capital gains are subject to tax at the rate of 20%
(plus applicable surcharge and education cess). Such long term capital gains are to be
computed by deducting from the sale consideration (i) expenditure incurred in connection
with such transfer; and (ii) except in case of certain bonds and debentures, the indexed cost
of acquisition of the capital asset. In computing the long term capital gains chargeable to
tax, no deduction under Chapter VI-A would be allowed under section 112 of the Act.
However, in respect of long term capital gains arising from transfer of listed securities,
units or zero coupon bonds, the maximum tax payable on long term capital gains is
restricted to 10% of the capital gains calculated without indexation of the cost of
acquisition.
Further, in terms of section 10(38) of the Act, any long term capital gain arising to the
Issuer on or after October 1, 2004, from the transfer of a long term capital asset being an
equity share in a company or a unit of an equity oriented fund, where such transaction is
chargeable to securities transaction tax (STT), is exempt from tax in the hands of the
Issuer. However, long term capital gains earned by the Issuer shall be taken into account in
computing the book profits for the purposes of computation of MAT.
(b) In terms of section 111A of the Act any short term capital gains arising to the Issuer from
the transfer of a short term capital asset being an equity share in a company or unit of an
equity oriented fund, where such transaction is chargeable to STT, would be subject to tax
only at a rate of 15% (plus applicable surcharge and education cess). In other cases, the
short term capital gains would be chargeable to tax at 30 per cent (plus applicable
surcharge and education cess). Further, deduction under Chapter VI-A would not be
allowed from such short term capital gains subject to tax under section 111A of the Act.
(c) As per the provisions of section 54EC of the Act and subject to the conditions specified
therein, long term capital gains arising to the Issuer {other than those exempt under section
10(38)} shall not be chargeable to tax to the extent such capital gains are invested in
certain notified bonds within six months from the date of transfer. If only part of the capital
gain is so reinvested, the exemption shall be proportionately reduced.
146
However, if the assessee transfers or converts the notified bonds into money within a
period of three years from the date of their acquisition, the amount of capital gains
exempted earlier would become chargeable to tax as long term capital gains in the year in
which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by
any person in a financial year is `50 lakhs.
II. Tax Benefits available to the Members of the Company under the Act
I. Special Tax Benefits
There are no special tax benefits available to the members of the Company.
II. General Tax Benefits
2.1 Resident Members
a) Under section 10(32) of the Act, any income of minor children clubbed in the total income
of the parent under section 64(1A) of the Act, will be exempt from tax to the extent of
`1,500 per minor child, whose income is so included.
b) The characterization of gains / losses, arising from sale of shares, as capital gains or
business income would depend on the nature of holding in the hands of the member and
various other factors.
c) Section 10(34) of the Act provides an exemption in respect of any income by way of
dividends referred to in section 115O (whether interim or final). Dividends referred to in
section 115-O would cover dividends declared, distributed or paid by the domestic
companies in respect of which the distributing company is liable to pay dividend
distribution tax. However, it may be pertinent to note that section 14A of the Act restricts
claim for deduction of expenses incurred in relation to exempt income
d) Under section 111A of the Act, capital gains arising from transfer of short term capital
assets, inter alia being an equity share in a company, which is subject to STT will be
taxable at 15 per cent (plus applicable surcharge and educational cess). In other cases, the
short term capital gains would be chargeable as part of the total income and the tax rates
would depend on the income slab. Further no deduction under Chapter VI-A would be
allowed in computing such short term capital gains subject to tax under section 111A of the
Act.
e) Under section 112 of the Act, long term capital gains are subject to tax at the rate of 20%
(plus applicable surcharge and education cess). Such long term capital gains are to be
computed by deducting from the sale consideration (i) expenditure incurred in connection
with such transfer; and (ii) except in case of certain bonds and debentures the indexed cost
of acquisition of the capital asset. In computing the long term capital gains chargeable to
tax, no deduction under Chapter VI-A would be allowed under section 112 of the Act.
However, in respect of long term capital gains arising from transfer of listed securities,
units or zero coupon bonds, the maximum tax payable on long term capital gains is
restricted to 10% of the capital gains calculated without indexation of the cost of
acquisition.
Further, in terms of section 10(38) of the Act, any long term capital gain arising to the
Issuer on or after October 1, 2004, from the transfer of a long term capital asset being an
147
equity share in a company, where such transaction is chargeable to securities transaction
tax (STT), is exempt from tax in the hands of the Issuer. However, in case of companies,
long term capital gains earned by the Issuer shall be taken into account in computing the
book profits for the purposes of computation of MAT.
f) As per the provisions of section 54EC of the Act and subject to the conditions specified
therein, long term capital gains arising to the members {other than those exempt under
section 10(38)} shall not be chargeable to tax to the extent such capital gains are invested
in certain notified bonds within six months from the date of transfer. If only part of the
capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a
period of three years from the date of their acquisition, the amount of capital gains
exempted earlier would become chargeable to tax as long term capital gains in the year in
which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by
any person in a financial year is `50 lakhs.
g) Under section 54F of the Act, where in the case of an individual or HUF capital gain arise
from transfer of long term assets {other than a residential house and those exempt under
section 10(38) of the Act} then such capital gain, subject to the conditions and to the extent
specified therein, will be exempt if the net sales consideration from such transfer is
utilised, for purchase of residential house property within a period of one year before or
two year from the date of transfer, or for construction of residential house property within a
period of three years after the date of transfer. If only a part of the net consideration is so
reinvested, the exemption shall be proportionately reduced.
h) In terms of section 36(xv) of the Act, the STT paid by the member in respect of the
transactions entered into in the course of the business would be deductible while
computing income chargeable under the head “Profits and Gains under Business or
Profession” arising from taxable securities transactions.
i) As per the provisions of section 10(23D) of the Act, all mutual funds set up by public
sector banks, public financial institutions or mutual funds registered under the Securities
and Exchange Board of India (SEBI) or authorised by the Reserve Bank of India are
eligible for exemption from income-tax, subject to the conditions specified therein, on their
entire income including income from investment in the shares of the company.
2.2 Non Resident Members other than Foreign Institutional Investors
a) Under section 10(32) of the Act, any income of minor children clubbed in the total income
of the parent under section 64(1A) of the Act, will be exempt from tax to the extent of
`0.015 lakh per minor child, whose income is so included.
b) The characterization of gains / losses, arising from sale of shares, as capital gains or
business income would depend on the nature of holding in the hands of the member and
various other factors.
c) Section 10(34) of the Act provides an exemption in respect of any income by way of
dividends referred to in section 115O (whether interim or final). Dividends referred to in
section 115-O would cover dividends declared, distributed or paid by the domestic
companies in respect of which the distributing company is liable to pay dividend
distribution tax. However, it may be pertinent to note that section 14A of the Act restricts
claim for deduction of expenses incurred in relation to exempt income.
148
d) Under section 111A of the Act, capital gains arising from transfer of short term capital
assets, inter alia being an equity share in a company, which is subject to STT will be
taxable at 15 per cent (plus applicable surcharge and educational cess). In other cases, the
short term capital gains would be chargeable as part of the total income and the tax rates
would depend on the income slab. Further no deduction under Chapter VI-A would be
allowed in computing such short term capital gains subject to tax under section 111A of the
Act.
e) Under section 112 of the Act, long term capital gains would be subject to tax at the rate of
20% (plus applicable surcharge and education cess). Such long term capital gains are to be
computed by deducting from the sale consideration (i) expenditure incurred in connection
with such transfer; and (ii) the cost of acquisition of the capital asset from the sale
consideration. However, there exists a special provision for non residents providing for
adjustments to the cost of acquisition, in respect of exchange rate fluctuations, in
computing the capital gains. Further, in computing the long term capital gains chargeable
to tax, no deduction under Chapter VI-A would be allowed under section 112 of the Act
Further, in terms of section 10(38) of the Act, any long term capital gain arising on or after
October 1, 2004, from the transfer of a long term capital asset inter alia being an equity
share in a company, where such transaction is chargeable to STT, is exempt from tax in the
hands of the member. However, in the case of companies, long term capital gains so earned
shall be taken into account in computing the book profits for the purposes of computation
of MAT.
f) As per the provisions of section 54EC of the Act and subject to the conditions specified
therein, long term capital gains arising to the members {other than those exempt under
section 10(38)} shall not be chargeable to tax to the extent such capital gains are invested
in certain notified bonds within six months from the date of transfer. If only part of the
capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a
period of three years from the date of their acquisition, the amount of capital gains
exempted earlier would become chargeable to tax as long term capital gains in the year in
which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by
any person in a financial year is `50 lakhs.
g) Under section 54F of the Act, where in the case of an individual or HUF capital gain arise
from transfer of long term assets {other than a residential house and those exempt under
section 10(38) of the Act} then such capital gain, subject to the conditions and to the extent
specified therein, will be exempt if the net sales consideration from such transfer is
utilised, for purchase of residential house property within a period of one year before or
two year from the date of transfer, or for construction of residential house property within a
period of three years after the date of transfer. If only a part of the net consideration is so
reinvested, the exemption shall be proportionately reduced.
h) In terms of section 36(xv) of the Act, the STT paid by the member in respect of the
transactions entered into in the course of the business would be deductible while
computing income chargeable under the head “Profits and Gains under Business or
Profession” arising from taxable securities transactions.
149
i) As per section 90 of the Act, the provisions of the Act or the provisions of the applicable
Double Tax Avoidance Agreement, whichever is more beneficial to the taxpayer /
assessee, would apply.
2.3 Special optional provisions available to Non Resident Indians under the Act
a) A Non Resident Indian (NRI), i.e. an individual being a citizen of India or person of Indian
origin has an option to be governed by the special provisions contained in Chapter XII-A
of the Act, i.e. “Special Provisions relating to certain incomes of Non-Residents”.
b) Under section 115E of the Act, where the NRI has subscribed the shares of the company in
convertible foreign exchange, long term capital gains arising to the non resident on transfer
of such shares {in cases not covered under section 10(38) of the Act} be chargeable to tax
at concessional flat rate of 10% (plus applicable surcharge and educational cess). In
computing the capital gains for non residents, arising from transfer of shares or debentures
of an Indian company, no indexation benefit is allowed. However, in such cases all the non
residents have been provided with a protection against foreign exchange fluctuation under
the first proviso to section 48 of the Act.
c) Under provisions of section 115F of the Act, long term capital gains {not covered under
section 10(38) of the Act} arising to the NRI from the transfer of such shares shall be
exempt from income tax if the net consideration is reinvested in specified assets within six
months of the date of transfer. If only part of the net consideration is so reinvested, the
exemption shall be proportionately reduced. The amount so exempted shall be chargeable
to tax subsequently, if the specified assets are transferred or otherwise converted into
money within three years from the date of their acquisition.
d) Under provisions of section 115G of the Act, it shall not be necessary for the NRI to
furnish his return of income if his only source of income is investment income or long term
capital gains or both arising out of assets acquired, purchased or subscribed in convertible
foreign exchange and tax deductible at source has been deducted there from.
e) Under section 115-I of the Act, the NRI may elect not to be governed by the provisions of
Chapter XII-A of the Act for any assessment year by furnishing his return of income under
section 139 of the Act declaring therein that the provisions of the Chapter shall not apply to
him for that assessment year and if he does so the provisions of this Chapter shall not apply
to him. In such a case the tax on investment income and long term capital gains would be
computed as per normal provisions of the Act, in which case the above stated provisions
from point (c) to (h) in Para 2.2 would be applicable.
2.4 Foreign Institutional Investors (FIIs)
a) Section 10(34) of the Act provides an exemption in respect of any income by way of
dividends referred to in section 115-O (whether interim or final). Dividends referred to in
section 115-O would cover dividends declared, distributed or paid by the domestic
companies in respect of which the distributing company is liable to pay dividend
distribution tax.
b) The characterization of gains / losses arising from sale of shares as capital gains or
business income would generally depend on the nature of holding in the hands of the
member and various other factors.
c) Under section 111A of the Act, capital gains arising from transfer of short term capital
assets, inter alia being an equity share in a company, which is subject to STT will be
150
taxable at 15 per cent (plus applicable surcharge and educational cess). In other cases, the
short term capital gains would be chargeable to tax at 30per cent (plus applicable surcharge
and education cess).
d) Under section 10(38) of the Act, any long term capital gain arising on or after October 1,
2004, from the transfer of a long term capital asset inter alia being an equity share in a
company, where such transaction is chargeable to STT, is exempt from tax in the hands of
the member. However, in the case of companies, long term capital gains so earned may be
taken into account in computing the book profits for the purposes of computation of MAT.
e) Section 115AD provides special provisions for taxability of various types of income of
FIIs. Under section 115AD long term capital gains arising from transfer of shares in a
company {other than those mentioned in point (d) above}, are taxed at the rate of 10%
(plus applicable surcharge and education cess). Such capital gains would be computed
without giving effect to the first and second proviso to section 48 of the Act. In other
words, the benefit of indexation or the adjustment in respect of foreign exchange
fluctuation, as mentioned under the two provisos would not be allowed while computing
the capital gains.
f) As per the provisions of section 54EC of the Act and subject to the conditions specified
therein, long term capital gains arising to the investors / members {other than those exempt
under section 10(38)} shall not be chargeable to tax to the extent such capital gains are
invested in certain notified bonds within six months from the date of transfer. If only part
of the capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a
period of three years from the date of their acquisition, the amount of capital gains
exempted earlier would become chargeable to tax as long term capital gains in the year in
which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by
any person in a financial year is `50 lakhs.
g) As per section 90 of the Act, the provisions of the Act or the provisions of the applicable
Double Tax Avoidance Agreement, whichever is more beneficial to the taxpayer /
assessee, would apply.
III. Tax Benefits under the Wealth Tax Act, 1957
Shares in a company held by a member will not be treated as an asset within the meaning of section
2(ea) of Wealth-tax Act, 1957. Hence, wealth tax is not leviable on shares held in a company.
IV. The Gift Tax Act, 1958
Since the provisions of The Gift Tax Act, 1958 have ceased to apply with effect from October 1,
1998 , gift of shares made on or after October 1, 1998 will not be liable to Gift Tax under the Gift
Tax Act, 1958. However, pursuant to the Finance Act, 2009, Section 56 of the Act has been
amended to provide that the value of any property, including shares and securities, received without
consideration or for inadequate consideration (from persons or in situations other than those
exempted under section 56 (vii) of the Act) will be included in the computation of total income of
the recipient and be subject to tax.
V. Direct Tax Code
151
The above statement does not provide the tax benefits under the Direct Tax Code which is likely to
be implemented from A.Y. 2013-14. The tax benefits under the said code are not furnished as the
same is under formative stage.
152
SECTION IV: ABOUT THE COMPANY
INDUSTRY OVERVIEW
We have relied on websites and publicly available documents from various sources. The data may have been
re-classified by us for the purpose of presentation. Neither we nor any other person connected with the Offer
has independently verified the information provided in this chapter. Industry sources and publications,
referred to in this section, generally state that the information contained therein has been obtained from
sources generally believed to be reliable but their accuracy, completeness and underlying assumptions are
not guaranteed and their reliability cannot be assured, and, accordingly, investment decisions should not be
based on such information.
Overview of the Indian Economy
India is one of the fastest growing economies in the world with a rapidly expanding entertainment and media
(“E&M”) industry.
According to the Ministry of Statistics and Programme Implementation‟s (MOSPI) revised estimates, India‟s
real GDP registered a lower growth of 6.9% during Fiscal 2012, as compared with 8.4% in Fiscal 2011,
largely attributable to global factors include in particular, the crisis in the euro zone area and near
recessionary conditions prevailing in Europe, slow growth in many other industrialized countries, increase in
crude price rate, etc. However, relative to many other economies in the world, growth of 6.9 per cent in India
is among the highest.
The following table illustrates India's real GDP growth between financial years 2009 and 2012 (at factor cost
at constant 2004-05 prices):
Fiscal 2009 Fiscal 2010 Fiscal 2011 Fiscal 2012
Real GDP Growth Rate (%) 6.7% 8.4% 8.4% 6.9% Source: Ministry of Statistics and Programme Implementation
Overview of the Indian Entertainment and Media Industry
The Indian E&M industry (primarily comprised, among others, of film, television, print media, animation
and visual effects VFX, radio and music) has witnessed steady growth in recent years and is estimated to
have reached `72,80,000 lakhs in 2011. The Indian E&M industry is projected to grow at a compound annual
growth rate (“CAGR”) of 14.90% from the year 2011 to the year 2016 to reach `1,45,70,000 lakhs. The
Indian E&M industry has grown at a CAGR of 9.09% between 2007 and 2011. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The following factors are expected to contribute to further growth of the Indian E&M industry:
the continued growth and development of the Indian economy;
favourable demographic characteristics and trends in India;
the cultural diversity of the Indian population;
the internationalisation of the Indian E&M industry;
the availability of popular content; and
digitisation of content.
The following table provides the expected sizes and growth rates of the various segments of the Indian E&M
industry for the years 2011 through 2016:
(` lakhs)
E&M
Industry 2011 2012P 2013P 2014P 2015P 2016P
CAGR
(2011 to
2016)
153
Segment
T.V.
32,90,000
38,00,000
43,50,000
51,40,000
61,80,000
73,50,000 17.00%
20,88,000
22,60,000
24,68,000
27,00,000
29,49,000
32,34,000 9.00%
Film
9,29,000
10,00,000
10,97,000
12,11,000
13,45,000
15,03,000 10.00%
Radio
1,15,000
1,30,000
1,60,000
2,00,000
2,40,000
2,95,000 21.00%
Music
90,000
1,00,000
1,13,000
1,31,000
1,54,000
1,82,000 15.00%
O.O.H.
1,78,000
1,95,000
2,15,000
2,36,000
2,60,000
2,90,000 10.00%
Animation
3,10,000
3,63,000
4,30,000
5,11,000
6,10,000
6,90,000 17.00%
Gaming
1,30,000
1,80,000
2,30,000
2,90,000
3,70,000
4,60,000 29.00%
Digital
Advertising
1,54,000
1,99,000
2,58,000
3,35,000
4,37,000
5,70,000 30.00%
Total
72,84,000
82,27,000
93,21,000
1,07,54,00
0
1,25,45,00
0
1,45,74,00
0 14.90% *P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
Favourable Demographic Characteristics and Trends in India
The growth of the Indian economy has led to increased income levels and has resulted in the availability of
greater amounts of disposable income. It is estimated that the number of households with an income of less
than ` 0.90 lakhs per year will decrease from approximately 1,011 lakhs households in 2005 to 499 lakhs
households in 2025. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media
& Entertainment Industry Report 2009”)
The following chart illustrates certain expected changes in the distribution of income groups in India:
E=Estimated
154
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2009”)
Approximately 70.0% of India‟s population was below 35 years of age in 2001. More than 50.0% percent of
India‟s population is expected to be under the age of 30 in 2015. (Source: Federation of Indian Chambers of
Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2009”)
The following chart illustrates the population distribution in India across various age groups:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2009”)
Cultural Diversity of the Indian Population
India is a country with significant geographic, linguistic and cultural diversity. Although catering to India‟s
diversity is challenging for the E&M industry, such diversity broadens the scope of services offered and
reduces the concentration of business risk. Regional content has emerged as one of the most significant
aspects of content customisation and has become a significant growth driver for the E&M industry in India.
The following charts illustrate the linguistic composition of the Indian film market, by shares of the number
of films released:
155
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
Certain E&M trends with regard to diversity include the growth in popularity of regional channels and the
expansion of regional channel portfolios by regional and national media companies. Content preferences
have shifted more towards socially relevant and localised / regionalised programs, such as Phulwa (Chambal
forest in MP), Diya Aur Baati Hum (Pushkar, Rajasthan), Agle Janam (Uttar Pradesh and Bihar), Pavitra
Rishta (Maharashtra), Balika Vadhu (Rajasthan) and Laado (Haryana). Large broadcasters have looked at
increasing their presence in regional market by new channel launch and M&A activity for example, launch of
Discovery Tamil, ETV‟s takeover by Network 18 etc. Dainik Bhaskar entered Marathi by launching editions
in Aurangabad, Nasik, Jalgaon and Ahmednagar and strengthened its position on Rajasthan and Jharkhand
by launching more editions. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian
Media & Entertainment Industry Report 2012”)
Internationalisation of the Indian E&M Industry
Indian E&M companies have begun targeting international markets. International demand for Indian content
has grown and a number of Indian television channels are currently broadcast across the world. For example,
NDTV has launched NDTV Arabia and NDTV Malaysia. Regional language channels such as Asianet have
also been broadcasting overseas. “Colors” was recently launched in the United States and the UK as “Aapka
Colors”. Content produced in India is targeted largely at the Indian diaspora in key markets, primarily the
United States, the UK, United Arab Emirates and South Africa. (Source: Federation of Indian Chambers of
Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2009” & “Indian Media &
Entertainment Industry Report 2010”)
Further, in recent years, some large budget and popular Hindi films have generated a significant share of
their box office earnings overseas. Overseas theatrical revenues alone have accounted for approximately
7.4% of Indian film industry revenues in CY 2011, which is complemented by overseas home viewing
revenue streams such as DVD and satellite broadcasts. Due to the presence of a significant non-resident
Indian population in countries around the world, E&M companies expect to increase their revenues from
such international markets and are now attempting to target non-resident Indians with their productions. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
The Availability of Popular Content
156
Over the years, the availability and variety of Indian film content has increased. Five films have breached the
level of `10,000 lakhs in 2011, more than double the count of films as compared to last year. Further, it was
not just the A-list star cast films that did well, niche / focussed content from independent film-makers also
gained widespread acceptance. “Ragini MMS”, “Murder 2” and “Tanu weds Manu” performed well at the
box office in 2011. Themes that were women oriented such as “No One Killed Jessica” and “The Dirty
Picture”, horror based “Haunted”, urbane life based “Zindagi Na Milegi Dobara”, “Delhi Belly” and romance
based “Ladies v/s Ricky Bahl” were all box-office hits. The Indian film industry has also witnessed the
increasing use of special effects and film viewing technologies. (Source: Federation of Indian Chambers of
Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Digitisation of Content
Digitisation is changing the Indian E&M industry. The introduction of the Conditional Access System has
led to the increasing popularity of digital cable. Further, the advent of direct-to-home service providers such
as Dish TV, Tata Sky, Sun, Big TV and Airtel Digital TV and the commercial launch of Internet protocol
television has increased the digitisation of E&M content. Digitisation has reached every aspect of the film-
making process in India, from production and post-production to distribution and projection. Further,
recently, the Central Government has made digitization of cable television mandatory by October 31, 2012,
in Mumbai, Delhi, Chennai and Kolkata.
Segments of the Indian E&M industry
The Indian E&M industry is primarily comprised, among others, of film, television, and animation and VFX
segments.
Film
The film segment is one of the largest segments of the E&M industry and is primarily comprised of films
distributed through theatrical exhibition, home video, C&S television. The film segment has grown by
11.50% from `833,000.00 lakhs in 2010 to `929,000.00 lakhs in 2011. In 2012, the film segment contributed
approximately 12.80% of India‟s total E&M industry revenue. The Indian film industry is projected to grow
at a CAGR of 10.10% from 2011 to 2016 to reach approximately `1,503,000 lakhs in 2016. (Source:
Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report
2012”)
Recent Trends in the Indian Film Industry
In the recent past, the following trends have emerged in the Indian film industry:
Changing trend in film production & distribution
Film budgets have increased sharply over the years.
Movies with familiar starcast and strong recall are believed to perform better on box office. 2012 has seen
sequels like Dabangg 2, Race 2, Housefull -2, Jism 2, Murder 3, Raaz 3, Kya super cool hai hum. Sequels
have historically made more money than the original film at the box office. Dhoom 2 did business of INR
15,000 lakhs compared to INR 7,000 lakhs for Dhoom.
Movies are also releasing on a wider scale. The number of domestic and international screens for big budget
films has more than doubled in the last year. Medium budget films have also observed a steady growth in
domestic screens. The average print size for top 3 films has increased from 1080 in CY 2008 to 3000 in CY
2011.
Demand for quality infrastructure in increasing rapidly. Integrated and well-equipped studios such as
Reliance and Yash Raj are providing quality infrastructure to film makers. On a daily basis, there is a
157
demand-supply gap of 10059 studio floors in Mumbai alone which is home for bollywood and Hindi GECs.
There is a clear potential for absorbing additional floor space.
Pan-India Release of Films
In recent years, there has been a growing trend among Indian producers and distributors to release the films
across larger networks via analogue or digital media. Pan-India releases enable producers to take advantage
of the publicity and attention which the film receives at the time of release. Further, it also helps to curb
down the incidence of piracy.
Exploitation of the Overseas Market by the Indian Film Industry
The growing popularity of Indian film content overseas has opened new avenues for the Indian film industry.
While the US region, UK and Middle East continue to account for the bulk of overseas revenues; markets in
South Korea, Western Europe, Taiwan and Africa are gearing up for Hindi films. Studios continue to seed
new markets for Indian films. For example, Vijay‟s Tamil film was screened in Denmark and „Kites‟ was
screened in Latin America. In 2011, „Ra-One‟ and „Bodyguard‟ were released with over 900 prints in the
overseas market. The industry believes that it is a question of influencing consumption patterns and
cultivating relationships with the local partners. The contribution of overseas revenue in the total film‟s
revenue can go up from its current levels of 10-15 percent to upwards of 40 percent. While most benefits
from these markets would accrue to the big budget films, there trickledown effect to quality content in
medium and low budget films is expected. Along with identification of new markets, Industry believes that
growth would also be driven by enhanced overseas marketing campaign and increased penetration in existing
areas. As a result of these and other factors, overseas theatrical revenues are expected to increase from
approximately `69,000.00 lakhs in 2011 to approximately `1,15,000.00 lakhs in 2016 and are expected to
constitute approximately 10.50% of Indian films‟ total revenues in 2016. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Growing Popularity of Hollywood and other Western Films Among the Indian Population
Along with changing lifestyles, the film preference of the Indian population is shifting towards Hollywood
and other Western films. The success of Hollywood films in India can be attributed to a number of factors
such as an ever rising English speaking population, the growth of multiplexes, increased international
exposure through internet, television and tourism, Hindi and local language dubbing and simultaneous global
releases. Given the rising importance of the Indian market for Hollywood producers, a large number of films
are being released in India prior to the US release to play on the prestige factor of watching films before the
rest of the world. In 2011, ten Hollywood films were released in India prior to their release in their home
market. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &
Entertainment Industry Report 2012”)
Revenue Streams of the Indian Film Industry
Domestic theatrical exhibition is the largest contributor of revenue for the Indian film industry. The second
largest contributor is overseas theatrical. However, contributions from cable and satellite rights are growing
at a faster pace and are likely to emerge as the second largest contributor in the near future.
The following chart illustrates the components of the Indian film industry revenue streams for the years 2007
through 2016:
158
P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
Domestic Theatrical
In 2011, theatrical revenue (including overseas collections) constituted approximately 81.5% of total Indian
film industry revenue. The revenue from domestic theatrical exhibition has increased from `620,000.00 lakhs
in 2010 to `688,000.00 lakhs in 2011, increase of 10.97%. This segment is expected to grow to
`1,080,000.00 lakhs in 2016. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG,
“Indian Media & Entertainment Industry Report 2012”)
The growth in domestic theatrical exhibition revenue is demonstrated by the following tables which provide
the net box office revenues for the top 10 grossing films in India in CY 2011 and 2012:
Top 10 Films – Domestic Box Office Revenue (Calendar
Year 2011)*
Top 10 Films – Domestic Box Office Revenue (Calendar
Year 2012)*
Rank Film Net Revenue (`
in lakhs)
Rank Film Net Revenue
(in lakhs)
1 Bodyguard 14,095.00 1 Ek Tha Tiger 18,654.64
2 Ready 12,086.00 2 Dabangg 2 13,681.00
3 Ra.One 11,475.00 3 Rowdy Rathore 13,166.00
4 Singham 9,776.00 4 Agneepath 11,996.00
5 Zindagi Na Milegi Dobara 8,988.00 5 Housefull 2 11,267.00
6 The Dirty Picture (Hindi) 7,518.00 6 Barfi ! 10,555.46
7 Don 2 7,091.00 7 Jab Tak Hai Jaan 10,151.32
8 Rockstar 6,762.00 8 Bol Bachchan 9,991.78
9 Mere Brother Ki Dulhan 5,781.00 9 Talaash 9,025.92
10 Delhi Belly 5,521.00 10 Son Of Sardaar 8,834.00
Total: 89,093.00 Total: 117,323.12
159
(Source: www.boxofficeindia.co.in)
*Top 10 films calculated on the basis of net collections received during the year indicated, regardless of release date.
The following table provides details of the size and growth of the Indian film industry for the years 2009
through 2016:
(` in lakhs)
2009 2010 2011 2012P 2013P 2014P 2015P 2016P CAGR
2011-2016
Total industry size 893,000 833,000 929,000 1,000,000 1,097,000 1,211,000 1,345,000 1,503,000
Growth (%) -6.72% 11.52% 7.64% 9.70% 10.39% 11.07% 11.75% 10.10%
Domestic theatrical
685,000 620,000 688,000 735,000 802,000 880,000 972,000 1,080,000
Growth (%) -9.49% 10.97% 6.83% 9.12% 9.73% 10.45% 11.11% 9.40%
*P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report
2012”)
The Bombay territory (i.e. Mumbai, Thane, Western Maharashtra and Gujarat) is the largest contributor to
the domestic theatrical revenue of Hindi films, followed by Delhi and Uttar Pradesh and Punjab (Punjab,
Haryana, Jammu and Kashmir and Himachal Pradesh). The following chart illustrates the contributions of
various territories to the domestic theatrical revenue of Hindi films:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2010”)
A recent change in the domestic theatrical exhibition segment is the emergence and growth of multiplexes.
Multiplex contribution has increased to approximately 25.00% of the total domestic theatrical revenues for
the overall Indian film industry in 2009 and as much as 60.00% for Hindi films. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2010”)
Further, many single-screen and stand-alone cinema theatres are being converted into multi-screen cinema
theatres and multiplexes. A number of single screen and stand-alone cinema theatres have been acquired on
lease for refurbishment or renovation or conversion to multiplexes. Such refurbishment or renovation and
conversion to a multiplex has resulted in higher occupancy rates and consequently, higher box office
collections.
160
In addition to the increase in admits in Indian multiplexes, the ATPs and food and beverage spending per
admit in India are likely to increase in line with the trends prevailing in the developed markets, which will be
beneficial to Indian multiplexes.
The growth of multiplexes in India is being driven by a variety of factors. We believe that cinema theatre
patrons often prefer multiplexes over single-screen cinema theatres as multiplexes function as comprehensive
entertainment platforms with cinema theatres, gaming parlours and food courts, thus catering to a wider
range of leisure time requirements. Further, we believe that the growing popularity of Hollywood films
among Indian viewers is also driving the growth of multiplexes in India as cinema theaters patrons typically
prefer to watch Hollywood films in multiplexes or refurbished cinema theatres. Film producers often prefer
large multiplex chains as channel partners as multiplex chains enable them to release a film on a pan-India
basis. Multiplexes are also instrumental in developing a separate class of audiences in large Indian cities for
niche and off-beat films.
Another important trend in the theatrical segment in India is the emergence of digital technology as a
preferred medium for the exhibition of films over analogue technology. The rising number of cinema theatres
and multiplexes in India equipped with digital projection technology provides the film industry with a larger
number of release centres for the distribution of their films. While prior to the increased penetration of digital
projection technology, a film was typically released in approximately 250 centres, films are now typically
released in 700 to 800 centres due to lower costs and improved logistics. The number of screens equipped
with digital projection technology is expected to increase significantly as producers and distributors utilise
more screens equipped with digital projection technology to ensure a wider release of their films, reduce
print costs and combat piracy. Digital projection technology also provides theatrical exhibitors with the
opportunity to receive additional revenues through alternative content offerings such as sporting events and
award shows. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &
Entertainment Industry Report 2010”)
In India, multiplex penetration (admits as a percentage of population) is quite low compared to the
penetration in more developed countries as shown in the following table. However, multiplex penetration and
SPH are expected to grow in line with overseas trends and the gap is expected to decrease as the propensity
to spend increases across the Indian populace as a result of increasing disposable incomes.
(Source: KPMG and CII, “Indian entertainment industry Focus 2010: Dreams to reality”)
Overseas Theatrical
30
43 45 4652 53
61
77
117
12
0
20
40
60
80
100
120
140
UK
Belg
ium
Germ
an
y
Sp
ain
Ita
ly
Irela
nd
Den
ma
rk
Fra
nce
US
Ind
ia
161
The demand for Indian films among the Indian population in the United States, UK and the Far East region is
growing. This is demonstrated by the contribution of overseas theatrical revenues in the total revenue of the
Indian film industry. The revenue from overseas theatrical exhibition is expected to grow from `69,000.00
lakhs in 2011 to `115,000.00 lakhs in 2016. (Source: Federation of Indian Chambers of Commerce and Industry
and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The growing popularity of Indian films in overseas market has opened new opportunities for Indian
exhibitors. Typically, cinema chains in the United States show very few foreign films, including Indian
films. This has created an opportunity for Indian exhibitors to establish cinema theatres in the United States
for exhibiting Indian films to the local Indian population. In addition, Indian film distributors may access a
unique distribution opportunity in exhibiting their films through Indian cinema chains instead of United
States cinema chains, as United States cinema chains often exhibit Indian films in smaller cinema theatres,
which causes poor customer experience that results in lower box office collections. Further, smaller cinema
theatres in the United States that exhibit Indian films typically deal with Indian film distributors by giving a
minimum guarantee and a percentage share of the overflow, which results in substantial under-reporting of
revenues.
Television
Television has played a dominant role in the Indian E&M industry, with a size of `3,290,000.00 lakhs and
believed to be approximately 1,460 lakhs television households in 2011. Household penetration of cable and
satellite television has increased to approximately 80.0% in the year. The number of television channels in
India has increased from 120 in 2003 to more than 623 in 2011. While general entertainment channels
(“GECs”) in Hindi and regional languages still garner a greater share of TV viewership, channels which
cater to niche audiences are also popular. (Source: Federation of Indian Chambers of Commerce and Industry and
KPMG, “Indian Media & Entertainment Industry Report 2012”)
The following chart illustrates the growth in number of cable and satellite (“C&S”) households in India in
2010 to 2016:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”).
The following charts illustrate the programming composition of India‟s GECs in 2004 and 2008:
162
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2009”)
Fictional television programmes remained the dominant genre in the Indian television industry, with films
ranking as the second most popular programme type. These fictional offerings have retained their
prominence despite the growing popularity of “reality TV” content. In 2008 and 2009, serialised “soaps”
occupied the most programming time and received the most viewership. However, viewer preferences have
shifted from the popular „saas bahu‟ programmes in favour of socially relevant and localised or regionalised
content. The number of big format programmes has also increased substantially over the last five years. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2010”)
The following chart illustrates the size of the Indian television industry for the years 2006 through 2016:
P = Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
163
The strength of the Indian economy and the increasing popularity of new distribution platforms such as
digital distribution are expected to propel the growth of the Indian television industry.
Animation and VFX
India‟s animation and VFX industry was approximately `310,000.00 lakhs in 2011 and is expected to grow
at a CAGR of 17.0 % to reach approximately `690,000.00 lakhs in 2016. The Indian animation and VFX
industry is driven by the increased consumption of animated content, creation of global intellectual property
formats, acceptance of 3D graphics and the spread of the industry to international markets. The use of VFX
in live-action films has grown significantly in recent years. Many live action films in India now include
special effects sequences and the duration of these sequences is estimated to have grown by nearly 40.0%
percent over 2008. The growing demand and capability of Indian studios to produce high quality VFX
content has helped Indian studios establish their presence in overseas markets. Overseas presence enables
Indian studios to create integrated production systems and generate robust pipelines of projects through their
global networks. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &
Entertainment Industry Report 2012”)
The following table illustrates the size of the animation and VFX industry in India for the years 2008 through
2011:
Segment (INR Lakhs) 2008 2009 2010 2011
CAGR (2008-
11)
Animation Services 48000 55200 62100 71000 14%
Animation Production 36000 36700 38600 42000 5%
VFX 23000 31500 44700 62000 39%
Post Production 68000 77600 90800 135000 26%
Total 175000 201000 236200 310000 21%
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &
Entertainment Industry Report 2012”)
The VFX industry in India is in an early stage of development and has the potential to grow into a
significantly larger industry. The use of VFX has been an integral part of many Hollywood films, with 8 out
of the 10 top grossing Hollywood films in 2011 featuring significant VFX sequences. The Indian film
industry is increasingly producing storylines and films oriented around the use of VFX. With due increases
in the capabilities of Indian VFX studios and competitive pricing, VFX is expected to become one of the top
outsourcing sectors in India. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian
Media & Entertainment Industry Report 2012”)
Unlike in India, the VFX industry in overseas markets has matured. However, the Indian VFX industry is
undergoing a series of changes in order to provide better quality service to viewers such as offering services
on alternative platforms such as television, Internet and mobile applications and offering high-definition
content, image up-scaling, conversion from 2D to 3D and CGI.
The following table provides the estimated cost of production of 30 minutes of animated content in India,
Korea/Philippines and North America:
164
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
165
BUSINESS
Overview
We are one of India‟s leading entertainment and media (“E&M”) companies with a presence across several
businesses such as theatrical exhibition of films, film and media services and television content production
and distribution. Our headquarters are located in Mumbai and we have operations across 79 cities and towns
in India and internationally, in, the UK and the United States.
Our theatrical exhibition business is our largest source of revenue. We operate one of India‟s largest cinema
chains, under the brand „BIG Cinemas‟, with 258 screens in India and an additional 194 screens in the United
States as of January 31, 2013. During Fiscal 2012, BIG Cinemas catered to approximately 502 lakhs and 74
lakhs consumers in India and overseas, respectively.
Our film and media services business comprising production services, post-production services and media
and creative services for films and television is our second largest source of revenue, which comprises:
Production services: We lease sound stages, shooting floors, standard and high definition multi-
camera equipment and other related equipment to television and film production companies.
Post-production services: We process and trade film negatives at our laboratory located in Film
City, Mumbai. Our 4K DI laboratory located in Film City, Mumbai undertakes quality enhancement
of film and television content through digital techniques.
Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content
to 3D and CGI services through our wholly owned subsidiary, Reliance MediaWorks Entertainment
Services Limited. In addition, our wholly owned subsidiaries located in United States and UK,
Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK) Limited,
respectively, are engaged in the business of digital image correction, film restoration and film
processing.
We operate our film post production services through our production laboratory in Mumbai and our creative
services through facilities in Burbank (United States), London (UK) and Navi Mumbai (India). Films
processed at our laboratory in Mumbai have won, among others, 14 national awards for cinematography and
our Company‟s film processing facilities have been certified by Kodak Imagecare, an internationally
recognised quality certification program, for each of the years beginning 2007. We were among four
companies to receive the “Judges Award for Creativity & Innovation” in post-production at the Hollywood
Post Alliance Awards in 2010. In August 2011, our Company received a patent for an innovation – “System
and method for removing semi-transparent artifacts from digital images caused by contaminants in the
camera‟s optical path”. We won the Scientific and Technical Award, 2012 at the Academy of Motion
Picture, Arts and Sciences in 2012, for the development of a unique and efficient system for the reduction of
noise and other artefacts, thereby providing high quality images required by the film making process.
As a part of our long term growth strategy of asset creation, during the previous five years, we have
established:
a business process outsourcing (BPO) facility at Navi Mumbai;
post-production facilities for television commercials and broadcast; and
a DI Lab.
Further, we have purchased broadcast and film cameras. We have also increased the number of screens
we operate. This has been achieved organically and has enhanced our reach in terms of exhibition
166
business and also enabled us to strengthen our capabilities in post-production services and creative
services divisions.
We are also in the process of establishing approximately 2,00,000 square feet studio located in Film
City, Mumbai with facilities for shooting films, television shows and television commercials, which we
believe meets international standards. This studio aims to provide a one-stop solution for all production
needs for domestic and international clients. When completed, the studio is expected to have three
studio buildings with eight sound stages with appropriate noise control and other features. A part of the
studio constituting one studio building with three sound stages is in operation since January 2011. We
expect to complete the remaining portion of the studio by December 2013.
We are also engaged in the business of television content production through our subsidiary, Big
Synergy Media Limited, under the brand “BIG Synergy”, which primarily produces non-fiction
programmes in addition to adapting international programme formats for Indian viewers. We have
produced shows such as Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum,
India‟s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively
distribute films.
For Fiscal 2012 and Fiscal 2011, our restated consolidated net loss after tax was ` 91,016.62 lakhs and `
32,816.99 lakhs, respectively. For Fiscal 2012 and Fiscal 2011, our consolidated total income was `
125,486.90 lakhs and ` 85,026.20 lakhs, respectively.
Our Competitive Strengths
We believe the following are our key competitive strengths:
Strong reputation and brand in the E&M sector
We believe that we have established a strong reputation and brand in the E&M sector. We have rebranded
our theatrical exhibition and our television content production businesses as “BIG Cinemas” and “BIG
Synergy”, respectively. This rebranding was undertaken in order to create a single E&M brand, “BIG”.
We have received various awards for our theatrical exhibition business, including “Multiplex of the Year”
for the year 2012 at Star Retail Awards, “Best Cinema Chain” for the year 2012 ZEE ETC Business Awards,
“Most Admired Innovative Concept of the Year” at the Images Retail Awards 2010 for our Ciné Diner theatre
exhibition concept, “Most Admired Retailer of the Year: Entertainment” award at the India Retail Awards in
2009, the “Exhibitor of the Year” award at the CineAsia 2008 awards and the “Retailer of the Year” in the
„Entertainment & Fun‟ category at the India Retail Summit in 2007. The Silent National Anthem campaign
launched by Big Cinemas has secured a silver lion in the PR Lions category and two bronze lions for Best
Use of Broadcast in a Promotional Campaign and Corporate Image & Information, Films categories in 2011.
BIG Synergy, under which we produce television content, has produced television shows such as Kaun
Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India‟s Got Talent, Aap Ki Kachehri
- Kiran Bedi Ke Sath and Sach Ka Saamna. Many of these shows have received high viewer ratings and
received awards in various categories.
Our Academy Award winner wholly owned subsidiary Lowry Digital, we believe is one of the leading
digital image correction and restoration facilities in the world. Lowry Digital‟s clients include industry
leaders such as Walt Disney Pictures and Television and Warner Bros. Entertainment Inc. Lowry Digital‟s
facility has provided image enhancement and restoration services to approximately 600 films as of January
31, 2013 and has worked on classics such as Casablanca, Singin‟ in the Rain, Sunset Boulevard and a
number of Walt Disney Pictures & Television classics such as Cinderella, Bambi, George of the Jungle,
Snow White, Fantasia, Tron, Tangled, Winnie the Pooh, Beauty and the Beast and 101 Dalmatians.
167
We invested 30% in capital of Galloping Horse America LLC. Consequently, Galloping Horse America LLC
has been renamed Galloping Horse-Reliance LLC. Galloping Horse-Reliance LLC has acquired certain
assets of Digital Domain Media Group Inc (DDMG), an Academy Award-winning digital production studio
in Hollywood. We believe that this association strengthens our position substantially as a major service
provider for Hollywood studios as also demonstrates our quality and efficient workflow processes as well as
strong brand repute.
We believe that our longstanding presence in the film processing business has made us one of the important
operators in the Hindi film category in addition to being a key operator in certain regional language films.
Films processed at our laboratory located in Mumbai have won, among others, 14 national awards for
cinematography and our film processing facilities have been certified by Kodak Imagecare, an internationally
recognised quality certification program, for each of the years beginning 2007.
We believe we have established a strong reputation and brand through the quality of our products and
services which have obtained industry recognition and customer satisfaction. We believe that our strong
reputation and brand differentiates us from our competitors.
Demonstrated ability to expand our operations both organically and inorganically
We have created a global E&M company that is capable of operating across the entire E&M business value
chain. Since the Reliance Group acquired control of our Company in the financial year 2006, we have grown
and diversified our business. Our revenues have grown from `36,296.74 lakhs in Fiscal 2008 to `1,25,486.90
lakhs in Fiscal 2012. Currently, we have diversified service offering across several businesses, such as
theatrical exhibition of films, film and media services and television and content production and distribution.
Our theatrical exhibition business has expanded from 32 screens across five cities as of March 31, 2006 to
452 screens across more than 101 towns and cities in India and the United States as of January 31, 2013. The
number of customers our Big Cinemas brand catered to in India increased from 129 lakhs in Fiscal 2008 to
576 lakhs across India and overseas in Fiscal 2012.
We have also demonstrated our ability to acquire companies located in India and overseas in order to
consolidate our position as a company that is capable of operating across the entire E&M business value
chain. For example, we acquired Rave Entertainment Private Limited (“Rave”), Synergy Communications
Private Limited (now, Big Synergy Media Limited), iLab and Lowry Digital between the financial years
2007 and 2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-
Reliance LLC, an associate entity, in financial year 2012. The acquisition of Rave helped us in establishing
our footprint in the North Indian cinema territories, while Synergy Communications Private Limited has
facilitated our entry into the business of television content production and Lowry, “Digital Domain” and
iLab have helped us establish significant presence in the North American and European markets, offering us
new business opportunities in image processing and restoration, 2D to 3D conversion and VFX.
Presence across various E&M businesses and geographies
We believe we are a one-stop solution provider for film and television producers and distributors in India.
We provide the entire range of film services, including studio rental, equipment rental, DI post-production
laboratory services, VFX, stereoscopic conversion, film processing, digital cinema mastering and operating
cinema theatres in India and US. Our presence across various businesses in the E&M sector allows allow us
to develop long-term relationships as we are able to cross-sell our various services and offer solutions for the
varying requirements of our customers.
Our strategy is to create a single global E&M company that is capable of operating in geographically diverse
markets and catering to a variety of consumers. We have expanded our operations by acquiring theatrical
exhibition assets in US. We have also established a presence in the film post-production services business in
168
the United States and the UK through the acquisition of Lowry Digital and iLab, respectively. We believe
that our multinational presence makes us an attractive proposition for our customers.
Our technological capabilities
We have attempted to develop or acquire the latest technological capabilities across our business lines to
ensure that we remain competitive. In our film and media services business, we utilise various sophisticated
technologies, including digital camera technology capable of recording high-definition video, sync-sound
enabled studio stages and fibre optic cables for the distribution of films.
We utilise proprietary image processing technology to deliver superior picture elements and have developed
a unique technology, the “Lowry Process”, which is used to create high image quality for all outputs,
including film, broadcast television, advertisements, digital cinema, Blu-Ray Disc and internet video. Lowry
Digital‟s services include film restoration, emergency image repair, digital blow-ups and DI enhancements.
Lowry Digital also offers image enhancement tools which are used for the restoration and upgrade of
damaged analogue film prints. We were among four companies to receive “Judges Award for Creativity &
Innovation” in post-production at the Hollywood Post Alliance Awards in November 2010. In August 2011,
our Company received a patent for the following innovation – “System and method for removing semi-
transparent artifacts from digital images caused by contaminants in the camera‟s optical path”. Our
Company was the first Indian company to be recognized in the category of science and technology for the
development of a unique and efficient system for the reduction of noise and other artefacts which provide a
high quality image required for the film making process at the Academy of Motion Pictures, Arts & Science
Awards 2012.
Our film processing laboratory, through its telecine scanners, enables us to capture the fine details of a filmed
image. We are capable of grading the film in an uncompressed 4K resolution, the highest available resolution
for film production.
We introduced the IMAX digital projection system in India in 2001, which has enabled us to take advantage
of the increasing number of IMAX and IMAX 3D releases.
The Reliance Group’s brand, experience and position in India and overseas
The Reliance Group is a diversified business group with a strong brand, level of experience and position in
India and overseas. The Reliance Group is headed by Anil Dhirubhai Ambani, one of India‟s leading
entrepreneurs, who has won several awards and was voted as the “Person of Year – 2008” by Light Readings
for outstanding achievements in the telecommunications industry and “Businessman of the Year” in a poll
conducted by The Times of India in 2006. Reliance Communications Limited, one of India‟s leading
wireless carriers, in terms of coverage and capacity, and Reliance Capital Limited, one of the India‟s leading
private sector financial services companies are part of the Reliance Group. The Reliance Group also includes
Reliance Power Limited, one of India‟s leading power development companies. The Reliance Group has a
large presence in the entertainment, communications and infrastructure sectors and we derive significant
benefits from our association with the group. For example, we are able to derive benefits of synergy in
approaching advertisers through our relationship with Reliance Broadcast Network Limited, a group
company which owns 92.7 Big FM, one of India's leading radio networks, and BIG Street, an out-of-home
media business. We believe that we will continue to benefit from the depth of experience of the Reliance
Group and our association with the Reliance Group significantly enhances our brand value.
Our Business Strategy
Our business strategy is to build upon our competitive strengths and business opportunities to continue to be
a leading E&M company. Our business strategy consists of the following principal elements:
169
Create lean front-end centers in overseas markets and substantial back-end delivery centres in India for
film and media services
Hollywood produces maximum number of high budget films with high expenditure on VFX and 3D
conversions. However, the cost of production in US is almost four times as compared to that in India (Source:
Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report
2009”). We have identified this opportunity and mapped the demand with supply. We have created strategic
front-ends in the markets of US (Burbank) and UK (London), complimented by back-end delivery centres in
India, one of which is located in a SEZ. The front-end centers in US and UK focus on business development
and hence are lean on assets. We intend to continue to focus on further enhancement of strategic front-end
tie-ups as also further strengthen the force-to-market (sales) teams backed by increasing back-end asset
creation in India, where our main delivery centres are located.
Continue to focus on increasing our revenue from film and media services through complementary
services
We intend to expand our service offerings in line with technological developments and market demand. For
instance, we have extended our BPO offerings from restoration and content processing to VFX, 2D to 3D
conversion and CGI keeping in line with the emerging market trends. We commenced production services
business with equipment rental and have extended our service bouquet by building a state-of-the-art studio in
Film City, Mumbai, comprising of three studio buildings with eight sound stages, which we believe will
significantly strengthen our ability to provide film and media services. While a part of the studio constituting
one studio building with three sound stages is operational, we expect to complete the remaining portion of
the studio by December 2013.
Opportunistically expand our theatrical exhibition business
The key elements of our growth strategy for our domestic theatrical exhibition business include the
following:
Focussing on select metro and tier 1 cities which we believe could potentially have a higher
consumption pattern; and
Expanding in certain select locations to establish a footprint or to strengthen our presence in identified
film territories.
A retail centric approach, to enhance the profitability of our theatrical exhibition business
Our key focus in improving the profitability of our theatres is through increasing patronage and improving
the overall customer experience, which we believe will lead to greater spending by customers, allow us to
command greater premiums in our ticket prices and increase advertising revenues. We seek to achieve this
through the following:
Enhancing our understanding of our customer to enable us to customise our programme selection.
Further, we propose to introduce movie and time specific pricing to increase admits and, consequently,
box office collections;
Offering the customer a wider F&B choice and providing the customer greater access to F&B option in-
theatre i.e. within the precincts of the auditorium;
Augmenting our advertising sales by better utilising the available on-screen and off-screen space;
Delivering consistent customer experience, in line with our proposition of delivering an affordable
luxury experience to larger pool of customers, whilst keeping a tight control on costs; and
170
Exploring avenues for rent rationalisation, in the context of the changing market environment.
Grow our business through internal restructuring
We would continue to evaluate various opportunities for the growth of our business. In order to garner
further investments with an aim to raise fresh capital for the growth of our business, we are considering
restructuring certain of our business divisions i.e. film and media services business and exhibition business,
including by transferring them to our subsidiaries. We may also consider options for entering into technical
and financial collaboration with strategic partners either directly or through our subsidiaries. For further
details, please see the chapter entitled “History and Certain Corporate Matters” at page 189.
Continue to pursue strategic acquisitions and alliances
We have expanded our operations by identifying and carrying out strategic acquisitions / alliances. The goals
that we hope to achieve through such strategic acquisitions/alliances include:
the expansion and enhancement of our businesses with minimum cost – both capital & operational;
the benefit of technical and operational synergies; and
expansion of our geographical reach.
We intend to continue to evaluate such options even in the future.
Recent measures to stimulate our business operations
The business of the Company is broadly segmented in 3 lines of businesses, i.e.
i. Theatrical Exhibition;
ii. Film and Media Services; and
iii. Television / Film production and distribution.
While we reported a loss of ₹ 91,016.62 lakhs, as restated in Fiscal 2012, we believe that our performance
must be viewed against the backdrop of certain legacy problems that we have faced and continue to face.
Further, we have initiated remedial measures which we believe have benefitted us and will be reflected in the
coming financial years. Set out below is a brief segment wise description of our operations since 2006, as
were then were, was acquired by the Reliance Group.
i. Theatrical Exhibition
The theatrical exhibition business has been our largest source of revenue since 2008. At the time of
the Acquisition we operated 5 multiplexes and 20 screens across Mumbai, Nashik and Pune. The
strategy behind the acquisition was to emerge as a leader in the theatrical exhibition business with a
pan-India presence of about 500 screens across Tier I, Tier II & Tier III cities/ towns. To implement
this strategy we built a projects team comprising engineers, architects and supply chain
professionals. The scale of recruitment was in line with the overall strategy.
In conformity with the strategy envisaged we acquired a number of properties and were operating
258 screens in India at end of January 2013, resulting in significant capital expenditure and,
consequently, high levels of debt. In addition to rapid expansion in India, we have entered into
overseas markets through acquisitions. By January 2013, we had established a presence in India and
the USA with a total of 121 properties with 452 screens.
171
However, due to changed economic scenario, we had to abate the envisaged growth plan. We
continued to retain the services of the projects team expecting to complete the targeted scale upon
recovery in the economic environment. These increased overheads along with the higher rentals
locked in during the expansion phase led to adverse impact in the financial results.
Accordingly, to fund growth and to reduce the debt component and thereby the debt servicing costs,
we proposed a rights issue in 2009. Unfortunately, though, given the macro-economic scenario in
and global financial crises post 2008, the rights issue could not be completed resulting in us bearing
a significant debt servicing cost. This Issue is expected to provide much required funds which will
enable us to reduce our debt servicing cost and shore up our resources.
In the interim, we have undertaken the following measures to enhance our operating efficiencies and
chart a path to profitability –
a) We have closed loss making properties
b) We have undertaken a manpower rationalization exercise to right size the project team to match
the changed role of focusing on maintenance rather than rapid expansion; and
c) We have identified properties with high rentals (as a percentage of revenues) and re-negotiated
the contracts to lower rentals; This is clearly visible as the rent expense as a percentage of
Exhibition Revenues has come down from 36.49% for the nine month period, April to
December 2011 to 31.84% for the nine month period, April to December 2012.
The above measures for Indian operations have resulted in improvement of standalone financials for
the theatrical exhibition segment. Standalone revenues for the segment have increased from `
30,430.69 lakhs for the nine month period, April to December 2011 to ` 32,972.88 lakhs for the
nine month period, April to December 2012, an 8.35% growth in spite of shutting down of loss
making properties. Standalone segment result (earnings before interest and tax) for the segment
showed marked improvement, reducing from loss of ` 9,659.53 lakhs for nine month period, April
to December 2011 to loss of ` -5,741.15 lakhs for nine month period, April to December 2012.
In the above context, we have decided to focus our energies on the cash flow generation from India
operations of the theatrical exhibition segment. In line with this thought process, we have truncated
our overseas business, by selling our Malaysian and Nepal theatre exhibition chain while continuing
our operations in the USA.
While exiting / closing loss making properties resulted in a write-off of approximately ₹ 5,289.69
lakhs for Fiscal 2012, we believe that this one-time exceptional loss which will enable us to re-focus
our priorities. We believe that these measures are bearing fruition which coupled with the recent
surge in the industry has enabled us to recover and generate profits at the EBITDA level. Further,
we also believe that these measures will generate sufficient cash for future growth.
ii. Film and Media Services (FMS)
FMS is categorized into i) Post production services, ii) production services & iii) media & creative
services. Production and post-production services have always been and continue to be profitable
business segments.
We realized that the trend of digitization was emerging across various industries including telecom,
retail, healthcare and manufacturing. Replacing the existing analog technology with digital
172
technology resulting in instant access to a full range of multi-media entertainment is expected to
have far reaching implications. This rapid shift towards new technology is expected to restructure
the entire industry and we believe will have significant impact on each business within the industry.
Keeping abreast with this new evolving trend, in Fiscal 2009, we decided to venture into media &
creative services including restoration, content processing, VFX and stereoscopic conversion and set
up a BPO in a SEZ at Airoli, Navi Mumbai of about 90,000 sq. ft.
In July 2011, we signed a three (3) year binding „Guaranteed Compensation‟ contract with Digital
Domain Production Inc., a subsidiary of DDMG, with an overall value in excess of ₹ 10,000 lakhs
annually to cater to their VFX & conversion projects. We hired and trained VFX & conversion
artists to deliver projects received from Digital Domain Production Inc. Since September, 2011 we
have serviced this contract, however, in September 2012, DDMG filed for bankruptcy along with its
subsidiaries and we had to write off ₹ 2,774.82 lakhs receivable from Digital Domain Production
Inc.
We had also signed a three (3) year contract with National Film Archives for India (NFAI) for
restoration of 1,000 films and hired restoration artists to restore these films. However, due to its
internal constraints, NFAI awarded around 600 films to us over a period of 3 years.
Both these cases resulted in excessive capacity, leading to significant impact on our profits.
Subsequently, we have adopted the following measures to curb losses:
a) Employee strength has been pared in line with the revenue visibility, resulting in a significant
reduction on the overall salary cost;
b) Relocation of facilities have resulted in rent reduction; and
c) Strict monitoring and control over collection of receivables.
d) Reinforce sale team in US to attract outsourcing work to India
e) Joint acquisition of VFX business of DDMG along with Beijing Galloping Horse Media Co.
Ltd.
We have expended significant energy in rationalizing the cost and paring our staff strength.
Similarly, we believe we have made substantial progress towards augmenting our delivery process
by way of technological integration, improved pricing mechanisms, building operational
efficiencies and expanding senior management bandwidth wherever critical, across geographies.
We are now, therefore, focusing on business development and revenue enhancement and are in
discussions with large corporate houses / studios across USA, UK and Asia.
We believe these efforts would pay off in the coming years, and result in a positive impact on the
cash flows from this business segment.
iii. Television / Film production and distribution
TV content production under the brand “BIG Synergy” has been a profitable venture from inception
and is expected to grow and deliver premium content.
Rights Issue
173
During Fiscal 2012, our total income was ₹1,25,486.90 lakhs and total expenses was ₹ 2,07,312.71
lakhs. The total expenses comprised finance costs (net) aggregating ₹ 39,751.40 lakhs, constituting
31.68% of our total income. In Fiscals 2011 and 2010, our finance cost (net) comprised only
20.60% and 15.67%, respectively, of our total income. The significant and continuous increase in
our finance cost is crucial and hampers our ability to grow.
As set out in the section entitled „Object of the Issue‟ at page 84 of this Draft Letter of Offer the
Objects of this Issue are to repay/pre-pay some of our outstanding debts. Reducing our outstanding
debt will, we believe, significantly help in reducing our finance cost over time. This will enable us
to attract finance on more favourable terms.
We expect that the measures mentioned above coupled with this Issue will send out a clear signal
that we are headed in the right direction and are on the path to recovery. We believe that this Issue is
in the best interests of our Company and, consequently, our shareholders.
Our Business Operations
Theatrical Exhibition Business
We operate one of India‟s largest cinema chains under the brand “BIG Cinemas”, with 258 screens in India
and 194 screens in the United States as of January 31, 2013. We introduced the IMAX digital projection
system in India and created properties such as BIG Cinemas R City, IMAX Big Cinemas and Metro BIG
Cinemas in Mumbai and Odeon BIG Cinemas in New Delhi.
The different types of agreements through which we operate our cinema theatres are set forth below:
Business conducting agreements: Typically, business conducting agreements are entered into
between our Company, the owners of the cinema theatre premises and persons/entities who hold
licenses to operate cinema theatres (“License Holders”). Under business conducting agreements,
our Company operates and manages the cinema theatres on a conducting basis exclusively, in
consideration of which, our Company pays certain conducting charges to the License Holders. The
licenses and approvals required to operate the cinema theatres are acquired and maintained by the
License Holders. The term of business conducting agreements ranges from three years to twenty
years.
Lease agreements: Lease agreements are entered into between our Company and the owners of the
cinema theatre premises. Under lease agreements, our Company obtains a right to occupy, possess
and operate various cinema theatres /multiplexes on exclusive basis, in consideration of which, our
Company pays rent along with certain additional charges. The licenses and approvals required to
operate the cinema theatres are acquired and maintained by our Company. Typically, the term of
these lease agreements ranges from ten years to twenty years.
Management agreements: Management agreements are entered into between our Company and the
owners of the cinema theatre premises. Under management agreements, our Company manages
operations for the cinema theatres, in consideration of which, our Company receives a monthly
management fee. Typically, the term of these management agreements ranges from three years to
ten years.
We operate most of our cinema theatres through lease arrangements, business conducting agreements or
through management agreements, except the multiplex situated at Mulund, Mumbai which is owned by us,
the multiplex situated at Wadala, Mumbai which is owned by us through a perpetual lease, the multiplex at
Kalyani Nagar, Pune which is owned by a partnership firm, wherein we are one of the partners and the
174
multiplex at Trimurti Chowk, Nashik, which is owned by our Joint Venture company through a lease of 90
years.
Our cinema theatres are equipped with various types of sound systems such as Dolby Digital (5.1, EX and
7.1) and DTS, comfortable seating and other customer-friendly amenities such as Mobile Box Office, mobile
phone ticket purchasing application, ticketing through “Print@Home” at select locations and “Easyticket”, a
virtual pre-paid card that may be used to purchase tickets.
The number of our cinema theatres and screens are as follows:
As of March 31 Number of Cinema
Theatres
Number of Screens in
Our Cinema Theatres
2006 8 32
2007 15 57
2008 54 147
2009 115 429
2010 140 508
2011 146 543
As of September 30, 2012 122 463
We operate 121 cinema theatres with 452 screens across India and the United States as of January 31, 2013.
India
In India, BIG Cinemas is located in 15 states and union territories with 97 properties and 258 screens as of
January 31, 2013.
The number of our cinema theatres and screens in the states and union territories of India as of January 31,
2013 were as follows:
State / Union Territory Number of Cinema
Theatres
Number of Screens
Andhra Pradesh 7 15
Chattisgarh 2 3
Delhi 1 2
Gujarat 12 32
Haryana 1 3
Karnataka 2 6
Madhya Pradesh 5 14
Maharashtra 28 89
Pondicherry 1 2
Punjab 6 20
Rajasthan 6 9
Tamil Nadu 10 18
Uttaranchal 1 3
Uttar Pradesh 14 39
West Bengal 1 3
Total 97 258
The following map illustrates our theatrical exhibition presence across 79 cities in India as on January 31,
2013:
175
The following table provides certain details of admits, ATP and SPH that illustrate the growth our theatrical
business in India over the last two financial years:
Particulars Fiscal Tier 1 Cities Tier 2 Cities Tier 3 Cities
Admits (lakhs) 2011 107 55 86
2012 187 117 198
ATP (`) 2011 150 94 64
2012 168 78 52
SPH (`) 2011 41 27 19
2012 43 28 20
The United States
We have 194 screens located across the United States as of January 31, 2013. We have 24 cinema theatres
located in the states of New Jersey, New York, Virginia, California, Florida, Illinois, Georgia, Maryland,
Tennessee, Kansas, Nevada, Ohio, North Carolina, Pensylvania and South Carolina. In addition to exhibiting
films in the Hindi, Tamil and Telugu languages, we also exhibit English-language Hollywood films. We
operate the leased cinema theatres under the brand name “Big Cinemas”.
176
The following map illustrates our presence across the United States as of September 30, 2012:
Our Theatrical Exhibition Business Model
Our revenues are primarily generated from the following:
patronage and patron spending, which entails revenues generated from ticket sales, food and
beverage sales, gaming and parking;
advertising revenue;
business conducting fees; and
management fees.
The yearly details of our patron admissions for our cinema theatres globally are as follows:
Period Patron Admissions (lakhs)
Fiscal 2012 576
Fiscal 2011 359
Fiscal 2010 331
Fiscal 2009 258
Fiscal 2008 126
Our patron admissions for our cinemas theatres are 109 lakhs across India and the United States for the four
months ended January 31, 2013.
We have adopted a price differentiation model which we believe has increased our appeal to consumers by
offering our patrons an enhanced cinema-going experience at each price point. Our ATPs for our single /
twin screen cinema theatres as compared to our multiplexes may vary.
177
We provide our patrons with a wide variety of food and beverage options which we believe enhances their
cinema-going experience. The food and beverage offerings are primarily in the nature of fast food.
The exhibition of films in our cinema theatres offers advertisers an opportunity to command the attention of a
large, captive audience and our pan-India presence is an attractive feature for such advertisers. Advertising
opportunities in a cinema theatre include space selling, on-screen and off-screen promotions and event
sponsorship. We have entered into advertising agreements with several reputed companies, including HDFC
Limited, ITC Limited and Reliance Communications Limited.
Film and Media Services
The film and media services business is our second largest source of revenue and has been operational for
approximately two decades. We have expanded our portfolio of film and media services to provide post-
production and grading with our 4K DI laboratory and our digital cinema mastering facility.
Our film production services and post-production services operations in India are located in Mumbai. In
Mumbai, we provide a wide range of services.
We are engaged in media & creative services such as restoration, content processing, VFX, conversion of 2D
content to 3D and CGI business through our subsidiary, Reliance MediaWorks Entertainment Services
Limited.
In addition, our subsidiaries located in United States and UK, Reliance Lowry Digital Imaging Services, Inc
and Reliance MediaWorks (UK) Limited, respectively, are engaged in the business of digital image
correction and film restoration.
The following chart illustrates our presence across the E&M industry value chain:
Film Processing Business
178
During the 18 months ended September 30, 2012, our film processing business serviced approximately 245
clients. For the said period, we provided film processing services for 230 films and developed approximately
28,316 analogue prints. We have established facilities that offer a variety of film negative services, including,
film negatives processing, colour correction, editing and the production of final prints for distribution. We
also supply film negatives to film producers.
We have received national Indian awards for best cinematography for 14 films including, Salim Langde Pe
Mat Ro in 1990, Suchitra Mitra in 1993, Tarana in 1996, Hum Dil De Chuke Sanam in 2000, Rasikpriya in
2001, Girni and Swades in 2005, Parsi wada Tarapore – Present Day & Yatra in 2006, Kramasha in 2007,
Three Of Us in 2008 and Kutty Srank and Gaarud in 2009, Anhe Ghorey Da Daan in 2011. In addition, our
processing laboratory in Chennai received the South Indian Cinematographers‟ Association award for „Best
Colour Laboratory‟ in 2007.
The customer base for our film processing business includes the following film companies:
Filmmakers Film
Yash Raj Films Private Limited Rocket Singh, Badmaash Company, Lafangey Parindey, Mere
Brother Ki Dulhan, Ladies V/S Ricky Bahl, Ishqzaade, Ek Tha
Tiger, Jab Tak Hai Jaan
Red Chillies Entertainment Private
Limited
Om Shanti Om, Main Hoo Na, Billu, Ra. One
Studio 18 OMG! Oh My God, Department, Shaitan, Son of Sardar, Aiyaa!
UTV Software Communications Limited Rowdy Rathore , Barfi!, Dev D, Fashion, Welcome To
Sajjanpur, Mumbai Meri Jaan, Race, Taare Zameen Par, The
Blue Umbrella, The Namesake, Aamir, Chup Chup Ke, Khosla
Ka Ghosla, The Happening, Chance Pe Dance, Udaan,
Raajneeti, Thank You
Vinod Chopra Films Private Limited Ferrari Ki Sawaari ,Munnabhai M.B.B.S., Parineeta, Eklavya,
Lage Raho Munna Bhai, 3 Idiots
Rakeysh Omprakash Mehra Productions Delhi-6, Teen Thay Bhai
Rajshri Productions Private Limited Vivah, Dulhan Wahi Jo Piya Man Bhaye, Tarana, Ek Vivaah . . .
Aisa Bhi, Love U Mr. Kalakaar
Arbaaz Khan Productions Dabangg
Shree Ashtavinayak Cine Vision Limited Bol Bachchan ,Maharathi, Jab We Met, Superstar, Bhagam
Bhag, Golmaal, Golmaal Returns, Kidnap, Khatta Meetha,
Rockstar,
Mukta Arts Limited 36 China Town, Apna Sapna Money Money, Black & White,
Good Boy Bad Boy, Sanai Choughade, Bombay to Bangkok,
Khanna & Iyer, Shaadi Se Pehle, Valu-The Bull, Yuvvraj, Hello
Darling
Tips Industries Limited Kismat Konnection, Naqaab, Race, Dil Apna Punjabi, Prince,
Tere Naal Love Ho Gaya
Nadiadwala Grandson Entertainment
Private Limited
Jaan-E-Mann, Heyy Babyy, Housefull, House Full -2
B.R.Films Private Limited Bhootnath, Videsh, Water, Baabul
Dharma Productions Student Of The Year, I Hate Luv Storys, We Are Family,
Agneepath, Ek Main Aur Ekk Tu,
Balaji Motion Pictures Limited Once Upon a Time in Mumbai , Ragini MMS, The Dirty Picture,
Kya Super Cool Hai Hum
Reliance Big Entertainment Private
Limited
Kites, Raavan, Singham, Real Steel, Cowboys & Aliens Don 2,
Dredd, Makkhi,
Eros Entertainment Aladin, Anjana Anjani, Veer, Shirin Farhad ki Nikal Padi,
Khiladi 786,
179
Function of a Film Processing Laboratory
A film processing laboratory is an integral component of the film production to exhibition value chain. Raw
film is created during the production of a film and cannot be exhibited in such form until it undergoes a
number of processes to render it fit for viewing, which are provided by a film processing laboratory. The
laboratory aligns the film, performs sound correction and edits the film, which results in the creation of a
final print. The final print is then previewed in a preview theatre as a quality check. Distributors, the last link
in the value chain, market and distribute a film after acquiring distribution rights from the film producers of
the film and ordering prints from the film processing lab.
Film Processing Business
The primary services of our film processing business are colour negatives processing, colour positives
processing, film printing, photo guard coating and ultrasonic film cleaning. The processes involved for
performing these services are detailed as follows:
Stage I
The exposed set of film negatives received from a studio or film shoot location is processed at our laboratory
in accordance with the picture negatives reports or camera logs prepared by the camera assistant for the
camera operator or director. After the film is developed, it is inspected in accordance with the camera log and
divided into sections according to the scenes and takes filmed. These sections are then joined together into
rolls, which are examined by the grading operator along with instructions received from the director to
determine how they will be printed. When the characteristics have been decided and recorded, a positive
print is made from the assembled rolls and processed through the developing machine. These prints are
known as the “daily rush prints”.
Stage II
The negatives then undergo post-production processes, such as editing and sound synchronisation, in order to
produce the first film print. The laboratory then assembles the final picture and tracks the negatives to match
the editor‟s work print so that the newly created print may be sent for approval to the film production
company.
Stage III
A potential release print is ready for release when printing characteristics for both picture and sound have
been standardised such that the required number of copies of may be produced in consistency with the
approved print.
We utilise a preview theatre featuring Dolby Digital Surround EX and DTS sound systems to carry out a
final inspection of the films processed at the laboratory, in addition to analysing films with densitometers and
film analysers. We utilise two diesel generators with a total capacity of 510 kVA as a backup power supply
for our critical chemical processing activities.
DI Laboratory Business
We have set up a 4K DI laboratory that converts traditional analogue films to digital formats and features
real-time grading capabilities. Its integrated client services include telecine, digital optics, promotional
packaging, conversion, scanning, high definition recording and subtitling. Films serviced by our DI
laboratory include, among others, Barfi!, Student Of The Year, Jab Tak Hai Jaan, Khiladi 786, Son of
Sardar, OMG! Oh My God, Chakravyuh, Rowdy Rathore, Ishqzaade, Bol Bachchan, Rockstar, Singam, RA-
One, Zindagi Na Milegi Dobara, Robot, 3 Idiots.
180
Digital Cinema Services Business
Our DCI grade digital cinema services business includes:
digital content mastering;
global fibre optic distribution; and
digital cinema theatre equipment installation and maintenace
Our secure digital cinema services facility located in Film City, Mumbai is connected to our digital
processing labs on the same premises and offers film producers and distributors the ability to have their
finished film delivered in both 35 mm and digital formats. We have introduced fibre optic distribution of
films from India to the United States. We have successfully transmitted several films over our fibre optic
network to the United States. The fibre optic network entails robust security features as well as flexibility,
timing and pricing advantages.
Film and Broadcast Equipment Rental Business
Our film and broadcast equipment rental business rents standard and high definition cameras with assorted
lenses and related equipment as well as providing solutions and expertise through our technical advisory
team. We have been associated with 33 programmes on general entertainment channels in India and 77
televised events during the 18 months ended September 30, 2012. During the said period, we have also
rented out film equipment for 70 films and 519 advertising films. The following table lists some of the
television programmes, event and films associated with our equipment rental business:
Television
Programmes
Events Films
Kaun Banega
Crorepati
Filmfare Awards Dabangg (Arbaaz Khan Productions)
Bigg Boss Femina Miss India Rajneeti (Prakash Jha Productions)
Jhalak Dikhla Ja Mirchi Awards Heroine (Bhandarkar entertainment)
Nach Baliye Star Parivaar Awards Barfi! ( Eshana Films)
India's Got Talent Star Screen Awards Bol Bachchan ( Shree ashtavinayak Films)
Pati Patni Aur Woh Standard Chartered Mumbai
Marathon
Rowdy Rathore ( SLB Films)
Rakhi Ka Swayamvar Airtel Delhi Marathon Ra – One (Red Chillies Entertainment)
Rahul Dulhaniya Le
Jayega
Sunfeast Bangalore Marathon Body Guard (The Reel Life Productions Pvt Ltd)
Dus Ka Dum Economic Times Awards Tees Maar Khan (Three's Company Productions)
Sacch Ka Samna Brand Equity Awards The Dirty Picture (Vertex Motion Pictures Pvt.
Ltd.)
Creative Services
We offer a wide range of creative solutions to filmmakers through pre-production, production and post-
production stages, including the following:
VFX
We offer various VFX Solutions, with specialisation in highly complex visual effects, such as concept
design, pre-visualisation, “look development”, on-set supervision, 3D animation and CGI, matte painting,
compositing and finishing for 2D and 3D stereoscopic feature films and television projects. Our VFX team is
supported by a network that connects our VFX studios in Burbank (USA), London (UK) and Navi Mumbai
(India). Galloping Horse - Reliance LLC, in which we have 30% stake, which owns Academy- award
winning brand “Digital Domain”, facilitates outsourcing of VFX and conversion work to India and UK and
also demonstrates our superior quality and efficient workflow processes as well as strong brand repute.
181
2D to 3D Conversion
We operate a 2D to 3D conversion facility that combines the technological and artistic abilities present in
Hollywood with the skills and large scale image processing capabilities in India. Through this facility, we
cater to the demand for converting new films shot in standard 2D and older legacy titles proposed to be
released in cinemas in stereoscopic 3D.
Our facility is based in Navi Mumbai (India) and houses a team of approximately 300 artists who have been
trained to develop 3D content. We have made our foray in the domestic markets with „Don 2‟.
Film Restoration
We provide comprehensive solutions for the transfer of analogue content to digital formats. We address the
needs of a variety of content owners, such as international film and television studios, television networks,
library owners and content distribution companies. We offer services including restoration, encoding,
transcoding, compression authoring, format and standards conversion, duplication and dubs, meta tagging,
repurposing, editing, versioning, quality control and archiving. We have serviced an order for the digitisation
and digital restoration of 600 films preserved by the National Films Archive of India.
Lowry Digital
Lowry Digital, our subsidiary based in Burbank, United States, operates digital restoration facilities. Lowry
Digital utilises proprietary image processing technology to deliver superior picture elements and has
developed a unique technology, the “Lowry Process”, which is used to create high image quality for all
outputs, including film, broadcast television, advertisements, digital cinema, Blu-ray Disc and Internet video.
Lowry Digital‟s services include film restoration, emergency image repair, digital blow-ups and DI
enhancements. Lowry Digital also offers image enhancement tools which are used for restoration and
upgrade of damaged analogue film prints.
Lowry Digital‟s clients include industry leaders such as Walt Disney Pictures & Television and Warner Bros.
Entertainment Inc. Lowry Digital‟s facility has provided image enhancement and restoration services to
approximately 600 films as of January 31, 2013 and has worked on film classics such as Casablanca, Singin‟
in the Rain, Sunset Boulevard and a number of Walt Disney Pictures & Television classics such as
Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie the Pooh, Beauty
and the Beast and 101 Dalmatians.
iLab
iLab is a dedicated film and media services facility located in Soho, London, which offers front-end,
processing, restoration and post-production services to broadcasters and studios. iLab has produced rushes
for many high-end films and original drama series for the British Broadcasting Corporation and offers
bespoke, specialist rush service for the advertising, feature film and broadcast markets.
3D Solutions
We offer integrated stereo services for various 3D alignment issues, image and detail enhancements, grain
and noise management and on-set consulting, in addition to our other services for stereoscopic 3D
conversion, DI grading for 3D, creation and handling of 3D pictures and 3D camera services. We have
performed image and detail enhancements, addressed vertical and horizontal alignments issues and „911
emergency services‟ for 3D versions of leading titles such as Journey to the Center of the Earth, X Games
3D: The Movie and Step Up.
Television Content Production and Film Distribution
182
Our television and film content production and distribution operations comprise of the production of
television content which is produced by us and includes related services of financing for the production of
films. Film distribution operations comprise of our share of revenue from exploitation and distribution rights
acquired by us, which may include as a package, theatrical rights and video and television rights.
We established BIG Synergy, our brand for television content production, through the acquisition of a
majority interest in Synergy Communications Private Limited (now known as Big Synergy Media Limited)
in 2007. Big Synergy is one of the key companies in non-fiction programming in India and has enjoyed
success in adapting international formats for Indian viewers.
In 2011, Big Synergy‟s KBC was awarded „CNN - IBN Indian of the Year 2011 Team KBC & Amitabh
Bachchan‟ in Entertainment Category, Big Star most Entertaining Series (TV Non-Fiction) 2011 & Big Star
TV Show of the Decade 2001-2010 at Big Star Entertainment Awards, Best Anchor Game/Quiz Show at
Indian Television Academy Awards 2011. Amongst various other awards, Big Synergy was awarded „Best
Production House of the Year‟ at the Ninth Indian Telly Awards 2009.
Big Synergy has produced shows such as Kya Aap Paanchvi Paas Se Tez Hain, India‟s Got Talent, Sach Ka
Saamna and Aap Ki Kachehri, Dus Ka Dum, Jhalak Dikhhla Jaa, Eureka, A Question of Answers, Mum Tum
Aur Hum, as well as the adaptation of international formats such as Mastermind India, University Challenge,
Kamzor Kadi Kaun, India‟s Child Genius, Bluffmaster, Heart Beat- Dil Tham Ke Khelo and Kaun Banega
Crorepati (Including its regional version), which have been broadcasted on major television channels,
including Colors, Star, Sony and Zee.
We also selectively undertake film distribution.
Competition
Our theatrical exhibition business comprises 258 screens across 97 cinemas and 79 cities in India as of
January 31, 2013 and is a combination of single or twin-screen cinemas and multiplexes. We face
competition from some organised multiplex chains in large cities. We face competition in the standalone
cinema theatre segment from local cinema theatres in Tier 2 Cities and Tier 3 Cities where customers are
price sensitive.
In our film processing business, we face competition from certain other laboratories.
We have set up our 4K DI laboratory and face competition from existing companies. However, the client
base that we have established through our processing laboratory has helped us establish ourselves as a key
player in this segment.
In our television content production business, we primarily create non-fiction content. This is an emerging
segment and the competition is restricted to a few players.
We also face intense competition in our US operations from various cinema theatre operators. Further, our
restoration business also faces competition in the United States.
Employees
As of January 31, 2013, we had 1,945 full-time employees and 2,143 workers on contract labour basis.
Insurance
We maintain a general all-risk insurance cover for all of our cinema theatres and premises including cover
for riots, terrorism, fire, burglary and housebreaking, flood and earthquake. We also maintain group medical
183
insurance covering all employees. In addition, we have also purchased a public liability non-industrial risk
policy, which has been extended to cover terrorism.
Intellectual Property
We do not own the trademarks “Reliance MediaWorks” and “BIG Cinemas”.
We have entered into a brand licensing agreement (“Brand Licensing Agreement”) with ADAV on
December 7, 2009 for the use of the trademarks “Reliance” and the logo on non-exclusive and royalty-free
basis for a period of 10 years. In terms of the Brand License Agreement, ADAV may terminate the
agreement on various grounds, including (i) our failure to repay debt in the ordinary course of business or
when such debt becomes due, (ii) change of control of our Company, (iii) or if we attempt to claim any right
of ownership in relation to the aforementioned brand. In consideration of the licensing rights, we shall incur
expenditure from time to time in accordance with the directives and guidance of the authorised
representatives of ADAV for an amount up to `5,000 lakhs.
We have entered into a brand license agreement (“Big BLA”) with Reliance Big Entertainment Private
Limited (“RBEPL”) on December 1, 2009 for the trademark “Big Cinemas” and the logo on a non-exclusive
and royalty-free basis for a period of 10 years. RBEPL may terminate the agreement on various grounds,
including (i) our failure to repay debt in ordinary course of business or when such debt becomes due or files
for insolvency, (ii) change of control of our Company, (iii) or if we attempt to claim any right of ownership
in relation to the aforementioned brand. In consideration of the licensing rights, we shall incur expenditure
from time to time in accordance with the directives and guidance of the authorised representatives of RBL
for an amount up to `5,000 lakhs.
Lowry Digital, one of our subsidiaries has obtained US Patent # 7,973,977 B2 issued on July 5, 2011 for
„System and Method for Removing Semi-Transparent Artifacts from Digital Images caused by Contaminants
in the Camera's Optical Path‟.
In addition, Lowry Digital has also filed an application with the US Patents and Trademarks Office for a
patent for „System and Method of Static Pattern Removal from Movies Captured using a Digital CCD
Camera‟.
Our Properties
Our registered office is located at Film City Complex, Goregaon (East), Mumbai 400 065, Maharashtra. We
have taken our registered office on lease from the Maharashtra Film Stage Cultural Development
Corporation Limited pursuant to the lease agreement dated October 21, 1996 for a period of 33 years for a
rent payable annually and which is subject to an escalation every five years. Additionally, our Company is
liable to pay a consideration linked to the activities carried out by our Company from the said premises. The
lease has been granted for a term of 33 years (“Initial Term”) from October 21, 1996. The term of the lease
shall be renewed for a further period of 33 years on an application made by our Company, six months prior
to the expiration of the Initial Term, on the same terms and conditions.
We own the multiplex situated at Mulund, Mumbai and the multiplex situated at Wadala, Mumbai is owned
by us through a perpetual lease. Further, the multiplex at Kalyani Nagar, Pune is owned by a partnership
firm, wherein we are one of the partners and the multiplex at Trimurti Chowk, Nashik, is owned by our joint
venture company through a lease of 90 years. We have entered into various lease agreements and conducting
agreements for our cinema theatres located in India and overseas and the period of such leases varies across
our properties.
Further, we have also entered into separate agreements dated August 14, 2007 on build, operate and transfer
basis for our studios located at Film City, Mumbai for a period of 20 years for a rent payable annually and
184
which is subject to an escalation every year. Our production laboratory in Mumbai and a post-production
services facility in Burbank, United States have been obtained on lease or leave and license basis.
185
REGULATIONS AND POLICIES
The following description is a summary of certain sector specific laws and regulations in India, which are
applicable to our Company. The information detailed in this section has been obtained from publications
available in the public domain. The regulations set out below may not be exhaustive, and are only intended
to provide general information to the investors and are neither designed nor intended to substitute for
professional legal advice.
The Cinematograph Act, 1952
The Cinematograph Act, 1952 (“Cinematograph Act”) was enacted to regulate and certify cinematograph
films prior to the exhibition of such films. The Cinematograph Act authorizes the Central Government to
constitute a Board of Film Certification in accordance with the Cinematograph (Certification) Rules, 1983
(“Certification Board”) for the purpose of sanctioning films for public exhibition in India.
The Cinematograph Film Rules, 1948
The Cinematograph Film Rules, 1948 (“Cinematograph Rules”) require that a license must be obtained
prior to storing of any film unless specifically exempted. Any person transporting, storing or handling films
must ensure compliance with the provisions of the Cinematograph Rules. The Cinematograph Rules inter
alia pertain to precautions against fire, restriction of access to films by unauthorised personnel, supervision
of operations, storage of any loose films, minimum specifications for aisle space and exits in storage rooms
and electrical installations in the storage rooms. The Cinematograph Rules also specify the form and the
procedure for applying for licenses, renewal of licenses, transfer of licenses, refusal to license and
cancellation of licenses.
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 (“Employment
Act”) was enacted with the object of regulating the conditions of employment of workers employed in
cinemas and theatres. A producer of a feature film is mandated to enter into an agreement with the workers
prior to employing them. Further, the Employment Act enjoins them to register such an agreement with the
relevant authority. The Employment Act specifically makes the Employees‟ Provident Funds and
Miscellaneous Provisions Act, 1952, the Payment of Gratuity Act, 1972 applicable to all cinema theatres
employing five or more workers. The Employment Act also provides a dispute resolution mechanism in
order to address grievances of the workers employed in such theatres or under producers of feature films.
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984 provides the form
of the agreement between a cine-worker and a producer of a feature film. The rules also provide the
procedure for reference of disputes and conduct of proceedings before a Conciliation Officer of a Tribunal.
The Cine-Workers Welfare Fund Act, 1981
The Cine-Workers Welfare Fund Act, 1981 (“Welfare Fund Act”) was enacted with the object of setting up
a welfare fund catering to needs of the cine-workers and to promote activities for their welfare. The Welfare
Fund Act provides that the Central Government will create a Cine-Workers‟ Welfare Fund wherein
contributions would be made by way of grants of the Central Government and voluntary contributions, etc.
The Welfare Fund Act also provides that the Central Government should apply such funds for the purpose of
meeting expenses incurred in carrying out activities for the general welfare of the cine-workers, including
providing grants and loans to such workers and to devise schemes for their benefit. The Central Government
is also authorised to require producers to furnish statistical data about workers employed under them from
time to time.
186
The Cine- Workers Welfare Cess Act, 1981
The Cine- Workers Welfare Cess Act, 1981 (“Cess Act”) provides for the levy and collection of cess on
feature films for the purposes of the Cine-workers Welfare Fund under the Welfare Fund Act. The Cine-
Workers Welfare Cess Rules, 1984 lays down the manner of collection of the duty prescribed in the Cess
Act.
The Copyright Act, 1957
The Copyright Act, 1957 (“Copyright Act”) covers registration of copyrights of original literary, dramatic,
musical and artistic works, cinematographic films and sound recordings. A copyright board has been
established under the Copyright Act (“Copyright Board”), which ordinarily hears all proceedings instituted
before it. The Copyright Board is deemed to be a civil court and all proceedings before the Copyright Board
are deemed to be judicial proceedings as understood under the Code of Criminal Procedure, 1887 and the
Indian Penal Code, 1887 respectively. The Copyright Act also envisages that a copyright office shall be
established under the immediate control of the registrar of copyrights.
In accordance with the Copyright Act, copyright shall subsist during the period of the lifetime of the author
and until sixty years thereafter. Licensing and assignment of copyright is permitted in accordance with the
provisions of the Copyright Act. Further, copyright societies have been set up for issuing and granting
licenses. Infringement of copyright is a civil or criminal offence under the Copyright Act depending on the
circumstances. Further, certain police officers above the rank of sub inspector may seize, without warrant, all
materials used for infringement. No court inferior to that of a Metropolitan Magistrate or a Judicial
Magistrate of the First Class is empowered to try an offence under the Copyright Act. The Copyright Rules,
1958 which sets out the procedure for the enforcement of the Copyright Act was also introduced with the
Copyright Act.
The Prevention of Food Adulteration Act, 1954
The Prevention of Food Adulteration Act, 1954 (“PF Act”) was enacted to make provisions for prevention of
food adulteration. The PF Act restricts a person from selling or distributing any food which is adulterated or
misbranded or being sold in contravention of the conditions of the license under which it is to be distributed
or sold or any article which has been prohibited from being sold by the Food Health Authority or any other
adulterant and enjoins all persons to ensure that the standards as laid down by the Central Committee on food
standards from time to time is met. The PF Act empowers the Central and the State Governments to appoint
public analysts and food inspectors for the purpose of taking samples of food from outlets selling them and
for examining such food. A purchaser or a recognized consumer association may also get any article of food
analysed in the manner prescribed. The PF Act also provides that a vendor of food items may be required to
disclose the name and other details of any person from whom such food has been purchased. The PF Act
outlines the procedure and penalties to be levied in cases of contravention of any of the terms of the PF Act.
The Standards of Weights and Measures (Packaged Commodities) Rules, 1977
The Standards of Weights & Measures (Packaged Commodities) Rules, 1977 (“Packaging Rules”) issued
under the Standards of Weights and Measures Act, 1976 set out the rules applicable to packaged
commodities. „Pre-packed commodity‟ means a commodity which, without the purchasers being present, is
placed in a package of whatever nature, whether sealed or opened,, so that the quantity of the product
containing therein has a pre-determined value and such value cannot be altered without the package or its lid
or cap, as the case may be, being opened or undergoing a perceptible modification. The expression „Package‟
is to be construed as a package containing a pre-packed commodity. Every company selling such packaged
product must ensure that the package being sold bears a label containing the name and address of the
manufacturer and the packer, a common description of the commodity/commodities packaged, the net
quantity of the commodity, the month and year of manufacture and the maximum retail price of the product.
187
A consumer buying such product must ensure that these declarations are mentioned prominently on the label
of the product. The Weights & Measures Organization, Controller of Legal Metrology at the state level,
Assistant Controller of Legal Metrology at the divisional level and Inspector, Weights & Measures at circle
level are the appropriate authorities for redressal of any disputes under the Packaging Rules.
Environmental Regulations
Our Company is subject to Indian laws and regulations concerning environmental protection. The principal
environmental regulations applicable to industries in India are the Water (Prevention and Control of
Pollution) Act, 1974, the Water Access Act, 1977, the Air (Prevention and Control of Pollution) Act, 1981,
the Environment Protection Act, 1986 and the Hazardous Wastes (Management and Handling) Rules, 1989.
Further, environmental regulations require a company to file an Environmental Impact Assessment (“EIA”)
with the State Pollution Control Board (“PCB”) and the Ministry of Environment and Forests (“MEF”)
before undertaking a project entailing the construction, development or modification of any plant, system or
structure. If the PCB approves the project, the matter is referred to the MEF for its final determination. The
estimated impact that a particular project might have on the environment is carefully evaluated before
granting clearances. When granting clearance, conditions may be imposed and the approving authorities may
direct variations to the proposed project.
Kyoto Protocol and Carbon Credits
The Kyoto Protocol is a protocol to the International Framework Convention on Climate Change with the
objective of reducing greenhouse gases (“GHG”) that cause climate change. The Kyoto Protocol was agreed
on December 11, 1997 at the third conference of the parties to the treaty when they met in Kyoto, and
entered into force on February
16, 2005. India ratified the Kyoto Protocol on August 22, 2006.
The Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008
The Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, as amended
(“Hazardous Wastes Rules”), which superseded the Hazardous Wastes (Management and Handling) Rules,
1989, state that the occupier will be responsible for safe and environmentally sound handling of hazardous
wastes generated in his establishment. The hazardous wastes generated in the establishment of the occupier
should be sent or sold to a recycler or re-processor or re-user registered or authorised under the Hazardous
Wastes Rules or should be disposed off in an authorised disposal facility. The Ministry of Environment and
Forests has been empowered to deal with the trans-boundary movement of hazardous wastes and to grant
permission for transit of hazardous wastes through any part of India. No import of hazardous waste is
permitted in India. The State Government, occupier, operator of a facility or any association of the occupier
will be individually or jointly or severally responsible for, and identify sites for, establishing the facility for
treatment, storage and disposal of hazardous wastes for the State.
Foreign Investment Regulation
The industrial policy was formulated in 1991 to implement the Government‟s liberalisation programme and
consequently industrial policy reforms relaxed industrial licensing requirements and restrictions on foreign
investment. FDI is allowed under the automatic route for 100% in respect of sector in which our Company
carries out its business.
Labour Laws
The workers are regulated by various labour laws, rules and regulations including the Workmen
Compensation Act, 1923, the Payment of Wages Act, 1936, the Employees‟ State Insurance Act, 1948, the
Factories Act, 1948, the Minimum Wages Act, 1948, the Employees‟ Provident Funds and Miscellaneous
Provisions Act, 1952, the Payment of Bonus Act, 1965, the Contract Labour (Regulation and Abolition) Act,
188
1970 and the Payment of Gratuity Act, 1972, where applicable.
Intellectual Property Laws
In India, trademarks enjoy protection under both statutory and common law. The Trade Marks Act, 1999
protects a distinct „mark‟. The Trade Marks Act also makes special provision for application of marks as
„collective marks‟. The Registrar of Trademarks is the authority responsible for registration of the
trademarks, settling opposition proceedings and rectification of the register of trademarks.
The Indian Patent Act, 1970 protects any new invention / inventive step allowing the inventor the
opportunity to reap the benefits of his effort. The patent may be for a process or a product. An application for
patent can be filed at any of the four patent offices in India.
Shops and Establishments legislations in various states
The provisions of various Shops and Establishments legislations, as applicable, regulate the conditions of
work and employment in shops and commercial establishments and generally prescribe obligations in respect
of inter alia registration, opening and closing hours, daily and weekly working hours, holidays, leave, health
and safety measures and wages for overtime work.
Property Laws
The Transfer of Property Act, 1882 (“TP Act”) lays down general principles for the transfer of immovable
property in India. It specifies the categories of property that can be transferred, the persons competent to
transfer property, the legitimacy of restrictions and conditions imposed on the transfer and the creation of
contingent and vested interest in the property. The TP Act recognizes, among others, sale, mortgage, charge
and lease as forms in which an interest in an immovable property may be transferred.
189
HISTORY AND CERTAIN CORPORATE MATTERS
Our Company was incorporated as Adlabs Films Private Limited on November 30, 1987, as a private limited
company under the Companies Act. Our Company was originally promoted by Manmohan Ramanna Shetty
and Vasanji Asaria Mamania. In 1989, our Company entered into the business of motion picture processing
by setting up a film processing laboratory at Andheri, Mumbai.
On June 19, 2000, pursuant to the conversion of our Company into a public company, the name of our
Company was changed to Adlabs Films Limited. Subsequently, in December 2000, our Company made an
initial public offering of 44,00,150 Equity Shares.
On June 30, 2005, one of our Promoters i.e. Reliance Land Private Limited entered into share purchase
agreements with Vasanji Asaria Mamania and Rubaiyat Arun Patel, erstwhile shareholders of our Company,
for acquiring an aggregate of 23.20% of our Company‟s shareholding. Further, our Board of Directors,
pursuant to their resolution dated August 8, 2005, approved issuance of 1,10,00,000 Equity Shares on
preferential basis to Reliance Land Private Limited along with 38,00,000 warrants, convertible into one
Equity Share for each warrant held of our Company. Pursuant to the above, Reliance Capital Limited and
Reliance Land Private Limited made an open offer for acquiring a further shareholding of 20.00% of our
Company in compliance with the Takeover Code.
On September 14, 2007, the High Court of Judicature at Bombay approved the scheme of amalgamation
pursuant to which Katch 22 Entertainment Private Limited was amalgamated with our Company with effect
from April 1, 2006. For further detail, please see the part entitled “Scheme of Arrangements- The scheme of
amalgamation amongst Katch 22 Entertainment Private Limited, our Company and their respective
shareholders and creditors” in this chapter at page 194.
On March 7, 2008, the High Court of Judicature at Bombay approved the scheme of arrangement pursuant to
which Entertainment One Limited was merged into our Company and the digital cinema business of Adlabs
Multiplex and Theatres Limited (formerly Mukta Adlabs Digital Exhibition Private Limited) was demerged
to our Company with effect from April 1, 2005. For further detail, see “Scheme of Arrangements- The
composite and modified schemes of amalgamation and arrangement amongst Entertainment One Limited,
Adlabs Multiplex and Theatres Limited (previously known as Mukta Adlabs Digital Exhibition Private
Limited), our Company and their respective shareholders and creditors” in this chapter at page 195.
On April 4, 2009, the High Court of Judicature at Bombay approved the scheme of arrangement pursuant to
which the radio business of our Company was demerged to Reliance Broadcast Network Limited (previously
known as Reliance Unicom Limited– subsequently it was also known as Reliance Media World Limited)
with effect from April 1, 2008. For further details, please see the part entitled “Scheme of Arrangements -
The scheme of arrangement amongst Reliance Broadcast Network Limited (previously known as Reliance
Unicom Limited– subsequently it was also known as Reliance Media World Limited) our Company and their
respective shareholders and creditors” in this section at page 197.
On May 8, 2009, the High Court of Judicature at Bombay approved the scheme of arrangement pursuant to
which Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private
Limited, Rave Entertainment Private Limited were merged into our Company with effect from April 1, 2008.
For further detail, see “Scheme of Arrangements - The scheme of amalgamation amongst Adlabs Multiplexes
and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited, Rave
Entertainment Private Limited, our Company and their respective shareholders and creditors” in this chapter
at page 198.
Our Company‟s name was further changed to Reliance MediaWorks Limited pursuant to which a fresh
certificate of incorporation dated October 5, 2009 was issued by the RoC.
190
Changes in Registered Office
The details of change in the registered office are set forth below:
Date of Change of
Registered Office
Details of the address of Registered Office Reasons
for
change
July 17, 2000 Change of registered office address from 35/38 Suren Road, Andheri (East),
Mumbai 400 093 to Film City Complex, Goregaon (East), Mumbai 400 065
Not
known.
The Main Objects of Company
The main objects, inter alia, contained in the Memorandum of Association of our Company are as follows:
1. To carry on the business of manufacturers, producers, exporters, importers, hirers, dealers,
distributors and exhibitors of raw films, chemicals, photographic and optical goods,
cinematographic films, video cassettes, apparatus, recorders, machinery and equipments pertaining
to or required for the film developing, printing, processing, editing, sound recording, re-recording,
transferring, dubbing of sound, video taping, transferring film to video, duplicating video cassettes,
discs or any format and to edit various formats.
2. To arrange to produce, secure, procedure, acquire, retain, purchase, publish, dispose off and
distribute advertisement films, TV serials, feature films, and programmes of educational, cultural,
devotional, industrial, health, entertainment, family welfare, tourism, Governmental and of other
subjects of interest.
The main objects as contained in the Memorandum of Association enable our Company to carry on the
business presently carried out as well as business proposed to be carried out and the activities proposed to be
undertaken pursuant to the Objects of the Issue.
Amendments to the Memorandum of Association
Our Memorandum of Association was amended from time to time pursuant to the change in the authorised
share capital of our Company. For details of change in the authorised capital of our Company since its
incorporation, please see the chapter entitled “Capital Structure” at page 70. The details along with the
amendment of our Memorandum of Association due to changes other than the changes to authorised share
capital are set out below:
Date of
shareholders‟
resolution
Nature of Amendment
December 2,
1999
The name of our Company was changed from Adlabs Films Private Limited to Adlabs
Films Limited
January 12, 2006 Additions were made to other objects of our Company by inserting clauses 86 to 91 to
the clause III(C) of the Memorandum of Association, as follows:
“86.To carry on the business of running a TV Station, Radio Station, recording studio,
shooting studio, sound mixing studio, dubbing studio, editing unit, preview theatre,
hiring out the film shooting equipment, studios for production of serials for the
Indian Market and export thereof.
191
Date of
shareholders‟
resolution
Nature of Amendment
87. To carry on the business of production of Television serials and radio programmes,
to play, relay, uplink, downlink, broadcast, telecast live or otherwise all kinds of
programme including but not restricted to entertainment, news, and current affairs,
health, game shows, songs, features films, educational, sports and artistic shows or
any other entertainment content.
88. To carry on the business of development of music software including series of
sound or music recorded on magnetic tapes, cassette, compact disk and digital
media, digital system for pre-production, post production and software for
commercial broadcasting which can be played and reproduced on any appropriate
apparatus for the Indian market and for transfer and export by any means out of
India.
89. To carry on business of financing any person or partnership firm, joint venture
company, body corporate or any other entity, whether incorporated or not and
whether in India or abroad related to film production, TV serial , TV channels,
radio programmes, running and maintenance of multiplex and all or any objects in
relation thereto.
90. To carry on the business of designers, manufacturers, processors, assemblers,
dealers, traders, distributors, importers, exporters, agents, consultants, designers
and contractors, for erection and commissioning turn-key or transporting and
converting, repairing, installing, training, servicing maintenance of all kinds of
telephone instruments, intercoms, accessories, telecommunication, radio
communication equipment further for the Indian market and for transfer and export
by any means out of India.
91. To carry on business of construction, development and maintenance, of residential
complex, commercial complex, entertainment centres, convention centres,
exhibition centres, guest house, restaurants, parlours, including all value added
services such as recreational and other facilities such as movie theatre, hotels, fast
food centre, exhibitions of paintings, telecommunication centre, fitness centre,
children‟s theme park, amusement park.”
September 30,
2009
The name of our Company was changed from Adlabs Films Limited to
Reliance MediaWorks Limited.
Promoters
The Promoters of our Company are Reliance Land Private Limited and Reliance Capital Limited. For details,
please see the chapter entitled “Our Promoters and Promoter Group” at page 223.
Capital raising activities through equity or debt
As on March 10, 2013, our Company had 96,273 members. For further details regarding our debt capital
raising, please see the chapter entitled “Financial Indebtedness” and regarding our equity capital raising,
please see the chapter entitled “Capital Structure” at pages 254 and 70, respectively.
Our Company‟s Shareholders
For details regarding our Comapny‟s shareholders, please see the chapter entitled “Capital Structure” at page
70.
192
Major events of our Company
The table below sets forth some of the key events in our history:
Year Event
1989 Entered the business of motion picture processing by setting up a film processing
laboratory at Andheri, Mumbai
December
2000
Our Company made an initial public offering of 44,00,150 Equity Shares
November
2001
Our first multiplex IMAX, Wadala, Mumbai was made fully operational
September
2005
The Reliance group acquired majority stake in our Company
January 2006 Commenced the film distribution business
January 2006 Issued and allotted 84,000 zero coupon foreign currency convertible bonds of face value of
€ 1,000 each aggregating € 84 million (FCCBs)
May 2006 Incorporated wholly owned subsidiaries Adlabs Films (USA) Inc. (now known as Reliance
MediaWorks (USA) Inc) and Adlabs Films (UK) Limited (now known as Reliance
MediaWorks (UK) Limited) in the United States and UK, respectively.
January 2007 Acquired a 51% stake in Synergy Communications Private Limited (Big Synergy Media
Limited) which is involved in the business of operating in television content production
April 2007 Acquired 100% stake in Rave Entertainment Private Limited in order to establish our
Company‟s presence in the theatrical exhibition business in the North
September
2008
Film processing, digital cinema and post-production facilities was certified by the
Federation Against Copyright Theft, UK
February 2008 Incorporated a wholly owned subsidiary namely Adlabs Films Netherland B.V. (now
known as Reliance MediaWorks (Netherlands) B.V.) in the Netherlands for distribution of
films
April 2008 Commenced exhibition business in the United States through our Subsidiaries
September
2008
Acquired 90% of the paid-up capital of Lowry Digital, which enabled us to enter film
restoration business in USA
October 2008 Our theatrical exhibition business was re-branded as “BIG Cinemas”
November
2008
Acquired 70% of the paid-up capital of Big Cinemas Lotus Five Star Sdn. Bhd., Malaysia,
through one of our Subsidiaries, which enabled us to enter the exhibition business in
Malaysia
May 2009 Entered into the business of digital restoration and content processing facilities by
acquiring AAA Digital Imaging Private Limited (now known as Reliance MediaWorks
Entertainment Services Limited)
June 2009 Transfer and vesting of our radio business in Reliance Unicom Limited (now known as
Reliance Broadcast Network Limited) with effect from April 1, 2008
January 2010 Acquired iLab, a dedicated film and media services facility located in Soho, London
January 2011 Commencement of operations of Stage 1 of our Studio
January 2011 Redeemed all outstanding FCCBs on the due date
May 2011 Sold 89.68% stake in Sri Ramakrishna Theatre Limited held by our Company. It is no
longer a subsidiary of our Company.
June 2011 Sold 50% stake in Cineplex Private Limited held by our Company. It is no longer a joint
venture of our Company.
April 2012 Sold 100% stake in Rave Entertainment and Food Nepal Private Limited held by the
Company
June 2012 Acquired the remaining 30% of the paid-up capital of Big Cinemas Lotus Five Star Sdn.
Bhd., Malaysia, making it a wholly owned subsidiary of Reliance MediaWorks (Malaysia)
Sdn Bhd., one of our indirect subsidiaries.
193
Year Event
September
2012
Invested 30% stake in capital of Galloping Horse America LLC and jointly bid for certain
assets and brand “Digital Domain” of DDMG. This gave us access to visual effects,
Mothership Media and certain other businesses and assets of DDMG and its subsidiaries.
September
2012
Sold 100% stake in BIG Cinemas‟ exhibition circuit in Malaysia held by our Company.
December
2012
In line with an MoU signed between Reliance Group and Wanda Group, China, to set up a
joint venture for strategic long term relationship between the two groups, we have agreed
to explore possible co-operation in the multiplexes business in India and the US.
Our Business
For details in relation to our business, please see the chapter entitled “Business” at page 165.
Injunction or restraining order
Our Company is under no injunction or restraining order.
Technology and market competence
For details on the technology and market competence of our Company, please see the chapter entitled
“Business” at page 165.
Competition
For details on the competition faced by our Company, please see the chapter entitled “Business” at page 165.
Our Subsidiaries and Joint Ventures
Our Company has 25 Subsidiaries, 2 (two) Joint Ventures and 1 associate. For details, please see the chapter
entitled “Our Subsidiaries and Joint Ventures” at page 201.
Proposed Internal Restructuring
On February 21, 2012, our Company‟s shareholders approved the proposed transfer of our exhibition and
film and media services divisions to certain of our wholly owned subsidiaries that we are yet to identify.
Accordingly, we are in process of transferring these business divisions.
We believe that such a transfer will enable us to garner fresh investment into these businesses and harness
the growth potential. Towards this end, we may also consider entering into technical and financial
collaboration with strategic and private equity partners either directly or through our subsidiaries. Further,
should an appropriate opportunity arise, we may acquire or partner with companies that we believe will
enhance our business, revenues and profitability. The impact, if any, on our financial statements cannot be
quantified, at present. The above process will not impact our equity share capital. Accordingly, our Company
has prepared pro forma financial statements which assume the transfer of our Company‟s film production
services and theatrical exhibition business division to our Subsidiaries at book values. For the purpose of the
transfer, it is assumed that all assets which form part of business division assets and business division
liabilities are transferred to the Subsidiaries of the Company and the amount receivable as consideration on
transfer is shown as a short term loan and advance recoverable from these Subsidiaries.
The pro forma financial information has been prepared by our management and has not been audited or
reviewed by our Auditors. It may not necessarily be indicative of the net results of operations that might have
194
been achieved by the Company for period or dates indicated, nor is it necessarily indicative of the future
results of the Company after such proposed internal restructuring. For further details, please see the chapter
entitled “Financial Statements - Pro Forma Financial Statements” at page F234.
Further, our Company has, on July 17, 2012, executed an indicative non-binding term sheet with a private
equity fund to acquire a substantial minority stake through an investment of `60,500 lakhs in our Company‟s
film and media services division. The investment is proposed to be made into the subsidiary of our
Company, into which our film and media services division will be transferred. No definitive agreement has
been executed in respect of the proposed transaction.
Scheme of Arrangements
a. The scheme of amalgamation (“Katch 22 Scheme”) amongst Katch 22 Entertainment Private
Limited (“Katch”), our Company and their respective shareholders and creditors.
The Katch 22 Scheme was approved by the High Court of Judicature at Bombay on September 14,
2007, thereby granting its approval for amalgamation of Katch with our Company. The purpose of
the merger was to achieve business synergies and operational consolidation as well as convenience.
The Katch 22 Scheme was approved with effect from April 1, 2006 (“Appointed Date”).
The Katch 22 Scheme provided for transfer and vesting of the “undertaking” (as described below) in
our Company. “Undertaking” means the entire business of Katch along with all assets, properties,
debts, liabilities and obligations pertaining to the same.
Set forth below are the key features of the Katch 22 Scheme:
Share Capital as on March 31, 2006:
i. The authorised capital of Katch was `1,00,000 and the issued, subscribed and paid
up share capital on the same date was `1,00,000. After March 31, 2006, Katch
issued and allotted 13,00,000, 9% non-cumulative redeemable preference shares
of `1 each for cash at a premium of `99 each.
ii. The authorised capital of our Company was `30,00,00,000 and the issued,
subscribed and paid up share capital on the same date was `19,90,03,750.
Date of operation of Katch 22 Scheme: The Katch 22 Scheme shall be effective from
Appointed Date but shall be operative from the date on which the certified copy of the
High Court order is filed with the RoC i.e. October 9, 2007 (“Effective Date”).
Transfer and vesting of Undertaking: With effect from the Appointed Date the undertaking
of Katch was transferred to and vested in our Company.
Cancellation of existing share capital: Upon the Katch 22 Scheme being effective, no
shares of our Company shall be allotted in lieu or exchange of its holding in Katch and the
share capital of Katch stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other
instruments to which Katch was a party to and which were subsisting before the
arrangement to be in full force and effect against and in favour of our Company.
Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against
Katch arising at the Appointed Date, as and from the Effective Date were continued and
195
enforced by or against our Company.
Staff, employees and workmen: On the Katch 22 Scheme becoming operative, all the
employees, staff and workmen of Katch in service on the Effective Date were transferred
to our Company on terms and conditions not less favorable than subsisting with Katch on
the Effective Date.
Accounting Treatment: Our Company recorded all the assets and liabilities of Katch
transferred to and vested in our Company at their fair values. The investment in Katch,
appearing in books of our Company stood cancelled. The difference, being the excess or
shortfall of the net assets of Katch transferred to our Company against the book value of
the investment in the shares of Katch recorded by our Company, along with a diminution
in the value of assets and liabilities of our Company, pursuant to the order of the High
Court of Judicature at Bombay, was adjusted against general reserves.
Dissolution: Upon the Katch 22 Scheme becoming effective, Katch stood dissolved
without being wound up.
b. The composite and modified scheme of amalgamation and arrangement (“EM Scheme”) between
Entertainment One Limited (“EOIL”), Adlabs Multiplex and Theatres Limited (previously, Mukta
Adlabs Digital Exhibition Private Limited) (“MADEL”), our Company and their respective
shareholders and creditors.
The High Court of Judicature at Bombay pursuant to its order dated September 15, 2006 sanctioned
the Composite Scheme which, interalia, provided for the amalgamation of EOIL and demerger of
the digital cinema business of MADEL to our Company with effect from April 1, 2005 along with
demerger of the radio business of our Company to RUL effective from March 31, 2006.
Subsequently, an application was filed with the Ministry of Information and Broadcasting by our
Company for the vesting of radio licenses held by it in the name of RUL. Pending receipt of the
above-mentioned approval and completion of licensing and other procedural formalities, the
Composite Scheme was eventually not filed with the RoC as required under the applicable
provisions of the Companies Act. Thereafter, our Company filed a modified scheme of arrangement
which was between our Company, EOIL, MADEL and their respective shareholders and creditors
(“EM Scheme”).
The EM Scheme was approved by the High Court of Judicature at Bombay on March 7, 2008,
thereby granting its approval to merge EOIL into our Company and demerge the digital cinema
business of MADEL to our Company. The purpose of the merger was to streamline the film
production and exhibition businesses of our Company. The EM Scheme was approved with effect
from April 1, 2005 (“Appointed Date”).
The EM Scheme provided for transfer and vesting of (i) “EOIL undertaking”; and (ii) “MADEL
undertaking” in our Company. “EOIL undertaking” means the entire business and, all assets,
properties, debts, liabilities and obligations of EOIL as on the Appointed Date. “MADEL
undertaking” means the digital cinema business and, all related assets, properties, debts, liabilities
and obligations pertaining to the digital cinema business of MADEL as on the Appointed Date.
Set forth below are the key features of the EM Scheme:
Share Capital as on March 31, 2006:
i. The authorised capital of EOIL was `25,00,000.00 and the issued, subscribed and
paid up share capital on the same date was `5,00,000.00.
196
ii. The authorised capital of MADEL was `10,00,00,000.00 and the issued,
subscribed and paid up share capital on the same date was `1,00,000.00.
iii. The authorised capital of our Company was `30,00,00,000.00 and the issued,
subscribed and paid up share capital on the same date was `19,90,03,750.
Date of operation of EM Scheme: The EM Scheme shall be effective from Appointed Date
but shall be operative from the date on which the certified copy of the High Court order is
filed with the RoC i.e. March 31, 2008 (“Effective Date”).
Transfer and vesting of Undertaking:
i. With effect from the Appointment Date and upon the EM Scheme becoming
effective, the EOIL undertaking was transferred and vested in our Company.
ii. With effect from the Appointed Date, the MADEL undertaking was transferred
and vested in our Company as a going concern. With effect from the Appointment
Date and upon the EM Scheme becoming effective, all statutory licenses and
permits required by MADEL for carrying on the business of digital cinema
business were vested in our Company in accordance with the terms of the EM
Scheme. However, the transfer and vesting of the MADEL undertaking is subject
to the securities, charges, mortgages and other encumbrances that were subsisting
in respect to MADEL undertaking or any part thereof.
Cancellation of existing share capital: Upon the EM Scheme being effective, no share of
our Company shall be allotted in lieu or exchange of its holding in EOIL and the share
capital of EOIL stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other
instruments to which EOIL and MADEL (pertaining to its digital cinema business) were
party to and which were subsisting on the Effective Date continued to be in full force and
effect in the name of our Company.
Legal Proceedings: All suits, appeal and other legal proceedings, pending on or after the
Appointed Date by or against EOIL and MADEL (pertaining to its digital cinema business)
were continued and enforced by or against our Company.
Staff, employees and workmen: With effect from the Appointment Date and upon the EM
Scheme becoming effective, all the employees, staff and workmen of EOIL and MADEL
(pertaining to its digital cinema business) were transferred to our Company on terms and
conditions not less favorable than subsisting with EOIL and MADEL on the Effective
Date.
Accounting Treatment: Upon the EM Scheme becoming effective, investments in the
equity share capital of EOIL as appearing in our Company‟s books of accounts was
cancelled. Also, all assets and liabilities recorded in the books of accounts of EOIL was
transferred to and vested in our Company and the same was recorded at their fair values as
on the Appointed Date. The inter company balances was cancelled. The excess of the fair
value of the assets recorded over and above the value of our Company‟s liabilities, less the
book value of the equity shares of EOIL as appearing in our Company‟s books, if positive,
was to be created to the general reserve account of our Company and if negative be debited
to the securities premium account. All credits were included in our general reserves, while
all debits were adjusted against the securities premium account. Our Company recorded the
asset and liabilities pertaining to digital cinema business of MADEL at the respective book
197
values in the books of our Company as on the Appointed Date. MADEL reduced the book
value of asset and liabilities pertaining to the digital cinema business of MADEL. Excess
of book value of assets over book value of liabilities of the digital media business of
MADEL to be adjusted; credits against general reserve and debits were to be adjusted
against the securities premium. Further, the financial statements of our Company prepared
after the Effective Date was not to record the results of the transaction related to radio
business from March 31, 2006 upto the Effective Date in its profit and loss accounts and,
instead, the net effect of all such transactions was to be debited / credited to the general
reserve account of our Company.
Dissolution: Upon the EM Scheme becoming effective, EOIL shall be dissolved without
being wound up.
Remaining Business of MADEL: The remaining business of MADEL and assets, liabilities
and obligations pertaining thereto shall continue to belong to and be vested in and be
managed by MADEL.
c. The scheme of arrangement (“RUL Scheme”) amongst Reliance Broadcast Network Limited
(previously known as Reliance Unicom Limited) (“RUL”), our Company and their respective
shareholders and creditors.
The RUL Scheme was approved by the High Court of Judicature at Bombay on April 4, 2009,
thereby granting its approval to demerge the radio business of our Company to RUL. The purpose
of the demerger was to explore the potential of radio business of our Company to the fullest,
provide focused leadership and management attention and enhance shareholder value. The RUL
Scheme was approved with effect from April 1, 2008 (“Appointed Date”).
The RUL Scheme provided for transfer and vesting of the “radio business undertaking” (as
described below) in RUL as a going concern. “Radio business undertaking” means the radio
business of our Company along with all related assets, properties, debts, liabilities and obligations
pertaining to the same and as mutually agreed between our Board of Directors and the board of
directors of RUL. Pursuant to the RUL Scheme, all the shareholders of our Company were issued
one RUL equity share for every equity share of our Company held by them.
Set forth below are the key features of the RUL Scheme:
Share Capital as on March 31, 2008:
i. The authorised capital of RUL was `1,05,50,000 and the issued, subscribed and
paid up share capital on the same date was `1,05,50,000.
ii. The authorised capital of our Company was `30,00,00,000 and the issued,
subscribed and paid up share capital on the same date was `23,06,30,850.
Date of operation of RUL Scheme: The RUL Scheme shall be effective from Appointed
Date but shall be operative from the date on which the certified copy of the High Court
order is filed with the RoC i.e. June 30, 2009 (“Effective Date”).
Transfer and vesting of Undertaking: With effect from the Appointed Date the radio
business undertaking of our Company was transferred to and vested in RUL as a going
concern. Also, all licenses, permissions, approvals and consents held by our Company that
are required for carrying out the operations of the radio business were also transferred and
vested in RUL and mutated by the statutory authorities concerned in favour of RUL. The
demerger was subject to the securities, charges and mortgages and other encumbrances
198
created to secure the liabilities forming part of the radio business.
Cancellation of existing share capital: Pursuant to the demerger, RUL shall in respect of
every equity share of `5/- each of our Company issue one equity share of `5/- each in
RUL. The capital of RUL shall increase to that extent. The shares held by our Company in
RUL stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other
instruments to which our Company (pertaining to its radio business) was a party to and
which were subsisting on the Effective Date continued to be in full force and effect in the
name of RUL.
Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against our
Company (pertaining to its radio business) were continued and enforced by or against
RUL.
Staff, employees and workmen: On the RUL Scheme being operative, all the employees,
staff and workmen of our Company (pertaining to its radio business) in service on the
Effective Date were transferred to RUL on terms and conditions not less favorable than
subsisting with our Company on the Effective Date.
Accounting Treatment: In terms of the RUL Scheme, the book value of the assets and
liabilities pertaining to our radio business undertaking were reduced by our Company at
our book values. The difference that is in excess of the book value of the assets pertaining
to radio business undertaking over liabilities after adjusting the investments made by our
Company in RUL was to be, in the event of a credit balance be credited to our Company‟s
capital reserve account, and in the event of a debit, was to be adjusted against our
Company‟s securities premium account. RUL shall record all assets and liabilities
pertaining to the radio business at the respective book values on the Appointed Date. There
will be a credit in share capital, to the extent of the shares issued.
Further, in relation to RUL, the liabilities in excess of assets recorded by RUL over and
above the amount credited as share capital after adjusting the cancellation of then existing
share capital of RUL held by our Company shall be deemed to comprise and be credited to
the extent of `10,000 lakhs was credited to the securities premium account, and the
balance, if any, was to be treated as capital reserve arising on acquisition of business
pursuant to the demerger. In event of shortfall, the same was to be debited and carried
forward as goodwill.
Remaining Business of our Company: The remaining business of our Company and assets,
liabilities and obligations pertaining thereto shall continue to belong to and be vested in
and be managed by our Company.
d. The scheme of amalgamation (“AAMR Scheme”) amongst Adlabs Multiplexes and Theatres
Limited (“AMTL”), Adlabs Multiplex Limited (“AML”), Mahimna Entertainment Private Limited
(“MEPL”), Rave Entertainment Private Limited (“Rave”) (collectively, “Transferor
Companies”), our Company and their respective shareholders and creditors.
The AAMR Scheme was approved by the High Court of Judicature at Bombay on May 8, 2009,
thereby granting its approval for merging AMTL, AML, MEPL and Rave with our Company. The
purpose of the merger was for administrative convenience and economical and operational synergy.
The AAMR Scheme was approved with effect from April 1, 2008 (“Appointed Date”).
The AAMR Scheme provided for transfer and vesting of the “undertakings” (as described below) in
199
our Company. “Undertaking” means the entire business of the Transferor Companies along with all
assets, properties, debts, liabilities and obligations pertaining to the same.
Set forth below are the key features of the AAMR Scheme:
Share Capital as on March 31, 2008:
i. The authorised capital of AMTL was `10,00,00,000 and the issued, subscribed
and paid up share capital on the same date was `5,00,000.
ii. The authorised capital of AML was `1,00,00,000 and the issued, subscribed and
paid up share capital on the same date was `98,10,000.
iii. The authorised capital of MEPL was `1,00,000 and the issued, subscribed and
paid up share capital on the same date was `1,00,000. After March 31, 2008, the
authorised share capital was changed to `2,90,000 and the issued, subscribed and
paid up share capital was `2,90,000.
iv. The authorised capital of Rave was `5,00,00,000 and the issued, subscribed and
paid up share capital on the same date was `3,00,00,000. After March 31, 2008,
the authorised share capital was changed to `5,00,00,000 and the issued,
subscribed and paid up share capital was `5,00,00,000.
v. The authorised capital of our Company was `30,00,00,000 and the issued,
subscribed and paid up share capital on the same date was `23,06,30,850.
Upon the sanction of the AAMR Scheme, the authorised share capital of our Company was
increased by the authorised share capital of the Transferor Companies.
Date of operation of AAMR Scheme: The AAMR Scheme shall be effective from
Appointed Date but shall be operative from the date on which the certified copy of the
High Court order is filed with the RoC i.e. May 29, 2009 (“Effective Date”).
Transfer and vesting of Undertaking: With effect from the Appointed Date the
undertakings of the Transferor Companies were transferred to and vested in our Company.
Also, all licenses, permissions, approvals and consents held by the Transferor Companies
were also transferred and vested in our Company. The merger was subject to the securities,
charges and mortgages and other encumbrances created or subsisting in respect of the
assets of the Transferor Companies with respect to the financial agreement and
arrangements entered into by the Transferor Companies.
Cancellation of existing share capital: Upon the AAMR Scheme being effective, no shares
of our Company shall be allotted in lieu or exchange of its holding in the Transferor
Companies and the share capital of Transferor Companies stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other
instruments to which the Transferor Companies were a party to and which were subsisting
on the AAMR Scheme coming into effect continued to be in full force and effect against
our in favour of our Company.
Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against the
Transferor Companies were continued and enforced by or against our Companies.
Staff, employees and workmen: On the AAMR Scheme becoming operative, all the
200
employees, staff and workmen of the Transferor Companies in service on the Effective
Date were transferred to our Company on terms and conditions not less favorable than
subsisting with the Transferor Companies on the Effective Date.
Accounting Treatment: On the AAMR Scheme becoming operative, all our investment in
the share capital of the Transferor Companies stood cancelled. Further, all assets and
liabilities of the Transferor Companies were recorded by our Company at their respective
fair values as on March 31, 2009. The inter company balance and transactions stood
cancelled. The difference between the amount of assets and liabilities taken over and
recorded by our Company after making all required adjustments along with any
appreciation/diminution in the value of our assets whether fixed or current investments, if
any, were to be adjusted into the capital reserve account.
Dissolution: Upon the AAMR Scheme becoming effective, the Transferor Companies
stood dissolved without being wound up.
Financial and Strategic Partners
Our Company does not have any financial or strategic partners. Further, our Promoters have not entered into
a sharholder‟s agreement in respect of the Company.
201
OUR SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIP
Our Company has the following 25 Subsidiaries, two Joint Ventures, 1 associate and is a partner in one
partnership firm. None of our Subsidiaries or Joint Ventures is listed on any stock exchange or has made any
public or rights issue in the last three years or has become a sick company under the meaning of the Sick
Industrial Companies Act, 1985 or is under winding up as of the date of this Draft Letter of Offer.
Unless otherwise specified, all information in this section is as on the date of this Draft letter of Offer.
Following are the Subsidiaries of our Company:
1. Big Cinemas Entertainment (DE) LLC;
2. Big Cinemas Entertainment LLC;
3. Big Cinemas Exhibitions LLC;
4. Big Cinemas Falls Church LLC;
5. Big Cinemas Galaxy LLC;
6. Big Cinemas IMC LLC;
7. Big Cinemas Laurel LLC;
8. Big Cinemas Norwalk LLC;
9. Big Cinemas Phoenix LLC;
10. Big Cinemas Sahil LLC;
11. Big Cinemas SAR LLC;
12. Big Pictures USA, Inc.;
13. Big Synergy Media Limited;
14. Phoenix Big Cinemas Management LLC;
15. Reliance Lowry Digital Imaging Services Inc.;
16. Reliance Media Consultant Private Limited;
17. Reliance Media & Marketing Communications LLC;
18. Reliance MediaVentures Private Limited;
19. Reliance MediaWorks Entertainment Services Limited;
20. Reliance MediaWorks Theatres Limited;
21. Reliance Media Works VFX Inc.;
22. Reliance MediaWorks (Mauritius) Limited;
23. Reliance MediaWorks (UK) Limited;
24. Reliance MediaWorks (USA) Inc.; and
25. Reliance MediaWorks (Netherlands) B.V.
Following are the joint ventures / associates set up by our Company:
1. Divya Shakti Marketing Private Limited;
2. Swanston Multiplex Cinemas Private Limited; and
3. Galloping Horse – Reliance, LLC.
Following is a partnership firm set up by our Company:
1. HPE / Adlabs LP
Subsidiaries
1. Big Cinemas Entertainment (DE) LLC
Corporate Information
Big Cinemas Entertainment (DE) LLC was incorporated in Delaware, USA, under applicable US
202
law on January 24, 2008 as Adlabs Entertainment (DE) LLC. Big Cinemas Entertainment (DE)
LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Entertainment (DE) LLC does not have any share capital.
Shareholding
Big Cinemas Entertainment (DE) LLC is a wholly owned subsidiary of Reliance MediaWorks
(USA) Inc., which in turn is a wholly owned subsidiary of our Company.
2. Big Cinemas Entertainment LLC
Corporate Information
Big Cinemas Entertainment LLC was incorporated in New Jersey, USA, under applicable US law
on December 19, 2007 as Adlabs Entertainment LLC. Big Cinemas Entertainment LLC is primarily
engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Entertainment LLC does not have any share capital.
Shareholding
Big Cinemas Entertainment LLC is a wholly owned subsidiary of Reliance MediaWorks (USA)
Inc., which in turn is a wholly owned subsidiary of our Company.
3. Big Cinemas Exhibitions LLC
Corporate Information
Big Cinemas Exhibitions LLC was incorporated in Delaware, USA, under applicable US law on
March 6, 2008 as Adlabs Exhibition LLC. Big Cinemas Exhibitions LLC is primarily engaged in
the business of exhibition of films.
Capital Structure
Big Cinemas Exhibitions LLC does not have any share capital.
Shareholding
Big Cinemas Exhibitions LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc.,
which in turn is a wholly owned subsidiary of our Company.
4. Big Cinemas Falls Church LLC
Corporate Information
Big Cinemas Falls Church LLC was incorporated in Virginia, USA, under applicable US law on
November 8, 2007 as Adlabs Falls Church LLC. Big Cinemas Falls Church LLC is primarily
engaged in the business of exhibition of films.
203
Capital Structure
Big Cinemas Falls Church LLC does not have any share capital.
Shareholding
Big Cinemas Falls Church LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc.,
which in turn is a wholly owned subsidiary of our Company.
5. Big Cinemas Galaxy LLC
Corporate Information
Big Cinemas Galaxy LLC was incorporated in Georgia, USA, under applicable US law on
December 21, 2007 as Adlabs Galaxy LLC. Big Cinemas Galaxy LLC is primarily engaged in the
business of exhibition of films.
Capital Structure
Big Cinemas Galaxy LLC does not have any share capital.
Shareholding
Big Cinemas Galaxy LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc.,
which in turn is a wholly owned subsidiary of our Company.
6. Big Cinemas IMC LLC
Corporate Information
Big Cinemas IMC LLC was incorporated in California, USA, under applicable US law on January
10, 2008 as Adlabs IMC LLC, and it was accepted by the concerned regulatory authority on January
19, 2008. Big Cinemas IMC LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas IMC LLC does not have any share capital.
Shareholding
Big Cinemas IMC LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which
in turn is a wholly owned subsidiary of our Company.
7. Big Cinemas Laurel LLC
Corporate Information
Big Cinemas Laurel LLC was incorporated in Maryland, USA, under applicable US law on
November 28, 2007 as Adlabs Laurel LLC. Big Cinemas Laurel LLC was earlier engaged in the
business of exhibition of films. However, the cinema theatre operated by the company, i.e. Big
Cinemas Laurel, was closed on May 9, 2010 due to expiry of its lease agreement. The company is
currently not engaged in any business.
Capital Structure
204
Big Cinemas Laurel LLC does not have any share capital.
Shareholding
Big Cinemas Laurel LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which
in turn is a wholly owned subsidiary of our Company.
8. Big Cinemas Norwalk LLC
Corporate Information
Big Cinemas Norwalk LLC was incorporated in California, USA, under applicable US law on
March 7, 2008 as Adlabs Norwalk LLC. Big Cinema Norwalk was closed on January 31, 2012 due
to expiry of lease of the premises. The company is at present not engaged in any business.
Capital Structure
Big Cinemas Norwalk LLC does not have any share capital.
Shareholding
Big Cinemas Norwalk LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc.,
which in turn is a wholly owned subsidiary of our Company.
9. Big Cinemas Phoenix LLC
Corporate Information
Big Cinemas Phoenix LLC was incorporated in Delaware, USA, under applicable US law on
February 22, 2008 as Adlabs Phoenix LLC. Big Cinemas Phoenix LLC is primarily engaged in the
business of exhibition of films.
Capital Structure
Big Cinemas Phoenix LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 51% member of Big Cinemas Phoenix LLC, which in turn is
a wholly owned subsidiary of our Company.
10. Big Cinemas Sahil LLC
Corporate Information
Big Cinemas Sahil LLC was incorporated in Illinois, USA, under applicable US law on November
7, 2008 and it was accepted by the concerned regulatory authority on November 13, 2008 as Adlabs
Sahil LLC. Big Cinemas Sahil LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Sahil LLC does not have any share capital.
205
Shareholding
Reliance MediaWorks (USA) Inc. is a 97% member of Big Cinemas Sahil LLC, which in turn is a
wholly owned subsidiary of our Company.
11. Big Cinemas SAR LLC
Corporate Information
Big Cinemas SAR LLC was incorporated in Michigan, USA, under applicable US law on
November 7, 2007 and it was accepted by the concerned regulatory authority on November 8, 2007
as Adlabs SAR LLC. Big Cinemas SAR LLC was earlier engaged in the business of exhibition of
films. However, the cinema theatre which was operated by the company, i.e. Big Cinemas Novi 8,
was closed on September 30, 2010 due to expiry of its lease agreement. The company is currently
not engaged in any business.
Capital Structure
Big Cinemas SAR LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 51% member of Big Cinemas SAR LLC, which in turn is a
wholly owned subsidiary of our Company.
12. Big Pictures USA, Inc.
Corporate Information
Big Pictures USA, Inc. was incorporated in New Jersey, USA, under applicable US law on March
30, 2009. Big Pictures USA, Inc. has not commenced operations. Big Pictures USA, Inc. proposes
to engage in the business of exhibition and distribution of films.
Capital Structure
No. of equity shares Authorised capital 2,500 equity shares of no par value
Issued, subscribed and paid-up capital Nil
Shareholding
Big Pictures USA, Inc. is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in
turn is a wholly owned subsidiary of our Company.
13. Big Synergy Media Limited
Corporate Information
Big Synergy Media Limited was incorporated in India on February 24, 1988 under the Companies
Act as Synergy Communications Private Limited. Big Synergy Media Limited is engaged in the
business of television contents production.
Capital Structure
206
No. of shares Authorised capital 20,000 equity shares of `100/- each and 12,00,000 preference
shares of `100/- each
Issued, subscribed and paid-up capital 10,000 equity shares of `100/- each
Shareholding
Our Company holds 5,100 equity shares of Big Synergy Media Limited, which constitutes 51% of
interest in Big Synergy Media Limited.
14. Phoenix Big Cinemas Management LLC
Corporate Information
Phoenix Big Cinemas Management LLC was incorporated in the State of Tennessee, USA, under
the applicable US law on February 22, 2008 as Phoenix Adlabs Theatre Management LLC, and it
was accepted by the concerned regulatory authority on February 25, 2008. Phoenix Big Cinemas
Management LLC is engaged in the business of managing theatres.
Capital Structure
Phoenix Big Cinemas Management LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 51% member of Phoenix Big Cinemas Management LLC,
which in turn is a wholly owned subsidiary of our Company.
15. Reliance Lowry Digital Imaging Services Inc.
Corporate Information
Reliance Lowry Digital Imaging Services Inc. was incorporated in California, USA, under the
applicable US law on April 3, 2008. Reliance Lowry Digital Imaging Services Inc. is engaged in the
business of digital processing of movie content.
Capital Structure
No. of ordinary shares Authorised capital 1,000 ordinary shares of $1/- each
Issued, subscribed and paid-up capital 1,000 ordinary shares of $1/- each
Shareholding
Reliance MediaWorks (USA) Inc., a wholly owned subsidiary of our Company, and our Company
hold 90.00% and 10.00% interest, respectively, in Reliance Lowry Digital Imaging Services Inc.
16. Reliance Media Consultant Private Limited
Reliance Media Consultant Private Limited was incorporated in India on February 16, 2012 under
the Companies Act. Reliance Media Consultant Private Limited is engaged in the business of
offering consultancy and advisory services in all areas of film and media services.
207
Capital Structure
No. of equity shares Authorised Share Capital 10,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 10,000 equity shares of `10/- each
Shareholding
Reliance Media Consultant Private Limited is a wholly owned subsidiary of our Company.
17. Reliance Media & Marketing Communications LLC
Corporate Information
Reliance Media & Marketing Communications LLC was incorporated in Delaware, USA, under the
applicable US law on May 13, 2009 as Adlabs Media LLC. Reliance Media & Marketing
Communications LLC is engaged in the business of advertising and marketing services.
Capital Structure
Reliance Media & Marketing Communications LLC does not have any share capital.
Shareholding
Reliance Media & Marketing Communications LLC is a wholly owned subsidiary of Reliance
MediaWorks (USA) Inc., which in turn is a wholly owned subsidiary of our Company.
18. Reliance MediaVentures Private Limited
Corporate Information
Reliance MediaVenture Private Limited was incorporated under the Companies Act, 1956 on June
19, 2012. Reliance MediaVentures Private Limited is yet to commence business operations.
Capital Structure
No. of equity shares Authorised capital 10,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 10,000 equity shares of `10/- each
Shareholding
Reliance MediaVenture Private Limited is a wholly owned subsidiary of our Company.
19. Reliance MediaWorks Entertainment Services Limited
Corporate Information
Reliance MediaWorks Entertainment Services Limited was originally incorporated in India on
March 27, 2006 under the Companies Act as AAA Infrastructure Investment Private Limited.
Reliance MediaWorks Entertainment Services Limited is engaged in the business of conversion of
2D movies into 3D movies, film restoration, image processing and content format processing.
208
Capital Structure
No. of shares Authorised capital 15,00,000 equity shares of `10/- each
50,00,000 preference shares of `1/- each
Issued, subscribed and paid-up capital 8,50,000 equity shares of `10/- each
12,00,000 preference shares of `1/- each
Shareholding
Reliance MediaWorks Entertainment Services Limited is a wholly owned subsidiary of our
Company.
20. Reliance MediaWorks Theatres Limited
Corporate Information
Reliance MediaWorks Theatres Limited was incorporated in India under the Companies Act, on
May 19, 2003 as Gemini Exhibitors Limited. It is a partner in a partnership firm Gold Adlabs which
operates a multiplex in Pune.
Capital Structure
No. of equity shares Authorised capital 5,00,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 50,000 equity shares of `10/- each
Shareholding
Reliance MediaWorks Theatres Limited is a wholly owned subsidiary of our Company.
21. Reliance Media Works VFX Inc.
Corporate Information
Reliance Media Works VFX Inc. was incorporated in California, USA, under the applicable USA
law on January 25, 2010. Reliance Media Works VFX Inc. is engaged in the business of providing
visual effects and animation services.
Capital Structure
No. of equity shares Authorised capital 200 equity shares of no par value
Issued, subscribed and paid-up capital 100 equity shares of no par value
Shareholding
Reliance Media Works VFX Inc. is a wholly owned subsidiary of Reliance MediaWorks (USA)
Inc., which in turn is a wholly owned subsidiary of our Company.
22. Reliance MediaWorks (Mauritius) Limited
209
Corporate Information
Reliance MediaWorks (Mauritius) Limited was incorporated in Mauritius, under the applicable
Mauritius law on March 20, 2008 as Adlabs (Mauritius) Limited. Reliance MediaWorks (Mauritius)
Limited is engaged in the business of exhibition of films.
Capital Structure
No. of ordinary shares Authorised capital 1,000 ordinary shares of no par value
Issued, subscribed and paid-up capital 1,000 ordinary shares of no par value
Shareholding
Reliance MediaWorks (Mauritius) Limited is a wholly owned subsidiary of our Company.
23. Reliance MediaWorks (UK) Limited
Corporate Information
Reliance MediaWorks (UK) Limited was incorporated in the UK, under the applicable UK law on
May 19, 2006 as Adlabs Films (UK) Limited. Reliance MediaWorks (UK) Limited is engaged in
the business of film distribution and in providing dedicated film and media services facility in
London through iLab.
Capital Structure
No. of ordinary shares Authorised capital 10,000 ordinary shares of £1/- each
Issued, subscribed and paid-up capital 10,000 ordinary shares of £1/- each
Shareholding
Reliance MediaWorks (UK) Limited is a wholly owned subsidiary of our Company.
24. Reliance MediaWorks (USA) Inc.
Corporate Information
Reliance MediaWorks (USA) Inc. was incorporated in New Jersey, United States, under the
applicable United States law on May 17, 2006 as Adlabs Films USA Inc. Reliance MediaWorks
(USA) Inc. is engaged in the business of exhibition, film distribution and post production services
through its subsidiaries. It is also engaged in the business of providing services such as film
restoration, emergency image repair, digital blow-ups and DI enhancements and also operates
digital restoration facilities through its subsidiaries Reliance Lowry Digital Imaging Services Inc.
and Reliance Media Works VFX Inc.
Capital Structure
No. of ordinary stock Authorised capital 200 ordinary stock of no par value
210
No. of ordinary stock Issued, subscribed and paid-up capital 200 ordinary stock of no par value, issued for $ 20,000
Shareholding
Reliance MediaWorks (USA) Inc. is a wholly owned subsidiary of our Company.
25. Reliance MediaWorks (Netherlands) B.V.
Corporate Information
Reliance MediaWorks (Netherlands) B.V. was incorporated in Netherlands, under the applicable
Netherlands law on February 8, 2008 as Adlabs Films Netherlands B.V. Reliance MediaWorks
(Netherlands) B.V. is engaged in the business of film distribution.
Capital Structure
No. of equity shares Authorised capital 900 equity shares of Euro 100/- each
Issued, subscribed and paid-up capital 180 equity shares of Euro 100/- each
Shareholding
Reliance MediaWorks (Netherlands) B.V. is a wholly owned subsidiary of our Company.
Joint Ventures
1. Divya Shakti Marketing Private Limited
Corporate Information
Divya Shakti Marketing Private Limited was incorporated in India under the Companies Act on
October 21, 1994. Divya Shakti Marketing Private Limited is engaged in the business of exhibition
of films.
Capital Structure
No. of equity shares Authorised capital 2,10,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 2,00,000 equity shares of `10/- each
Shareholding
Our Company holds 1,00,000 equity shares of Divya Shakti Marketing Private Limited, which
constitutes 50% of interest in Divya Shakti Marketing Private Limited.
2. Swanston Multiplex Cinemas Private Limited
Corporate Information
Swanston Multiplex Cinemas Private Limited was incorporated in India under the Companies Act
on October 11, 2001. Swanston Multiplex Cinemas Private Limited is engaged in the business of
exhibition of films.
211
Capital Structure
No. of equity shares Authorised capital 30,00,000 equity shares of ` 10/- each
Issued, subscribed and paid-up capital 20,30,000 equity shares of ` 10/- each
Shareholding
Our Company holds 10,15,000 equity shares of Swanston Multiplex Cinemas Private Limited,
which constitutes 50% of interest in Swanston Multiplex Cinemas Private Limited.
Associates
3. Galloping Horse-Reliance LLC
Corporate Information
Galloping Horse-Reliance LLC was incorporated in Delaware, USA under applicable law on
September 17, 2012. It is engaged in the business of visual effects through its wholly owned
subsidiaries.
Capital Structure
Galloping Horse-Reliance LLC does not have share capital.
Shareholding
Reliance MediaWorks (USA) Inc., our wholly owned subsidiary is 30% member of Galloping
Horse-Reliance LLC.
Partnership Firm
1. HPE / Adlabs LP
Corporate Information
HPE /Adlabs LP was incorporated in California, United States of America under applicable law on
June 9, 2006. It is engaged in the business of production of movies.
Capital Structure
HPE/ Adlabs LP’s share capital is does not have any share capital.
Shareholding
Our Company is a limited partner in HPE / Adlabs LP.
Interest of our Subsidiaries, Partnership Firm and Joint Ventures in our Company
None of our Subsidiaries, Partnership Firm and Joint Ventures holds any Equity Shares in our
Company. We have entered into certain transactions with our Subsidiaries and Joint Ventures. For
details, please see the chapter entitled “Financial Statements” at page F1.
212
OUR MANAGEMENT
Board of Directors
According to our Articles of Association, our Company is required to have not less than three Directors and
not more than 12 Directors. Our Company currently has five Directors.
The following table sets forth details regarding the Board of Directors of our Company as of the date of filing
this Draft Letter of Offer:
Name, Father‟s Name, Designation,
Term, DIN, Occupation, Nationality
and Address
Age
(in years)
Other Directorships/Partnerships/Trusts in
which our Director is a trustee
Gautam Doshi
Father’s name: Bhailal Doshi
Designation: Non-Executive Non-
Independent Director
Term: Liable to retire by rotation
DIN: 00004612
Occupation: Service
Nationality: Indian
Address:
402, Hamilton Court
Tagore Road, Santa Cruz (West)
Mumbai 400 054.
60 Other directorships
1. Connect Infotain Private Limited;
2. Digital Bridge Foundation;
3. Piramal Life Sciences Limited;
4. Reliance Anil Dhirubhai Ambani Group
Limited;
5. Reliance Big TV Limited;
6. Reliance Broadcast Network Limited;
7. Reliance Communications Infrastructure
Limited;
8. Reliance Home Finance Limited;
9. Reliance Telecom Limited;
10. REL Utility Engineers Limited (formerly
known as Sonata Investments Limited);
11. Sterlite Industries (India) Limited; and
12. Telecom Infrastructure Finance Private
Limited.
Partnerships
1. Gautam Doshi & Co.
Amit Khanna
Father’s name: Jawaharlal Khanna
Designation: Non-Executive Non-
Independent Director
Term: Liable to retire by rotation
DIN: 00005430
Occupation: Media Professional
Nationality: Indian
Address:
301, Sea Star, 3rd
Floor
Balraj Sahani Marg, Juhu
62 Other directorships
1. Earth Communications Office - India
Association;
2. Reliance BIG TV Limited; and
3. Reliance Entertainment Private Limited.
4.
Proprietorships
1. Film Unit; and
2. Media Corp
Trusts
1. Mumbai Academy of Moving Images
213
Name, Father‟s Name, Designation,
Term, DIN, Occupation, Nationality
and Address
Age
(in years)
Other Directorships/Partnerships/Trusts in
which our Director is a trustee
Mumbai 400 049.
Sujal Shah
Father’s name: Anil Shah
Designation: Non-Executive
Independent Director
Term: Liable to retire by rotation
DIN: 00058019
Occupation: Professional
Nationality: Indian
Address:
9, Ganesh Bhuvan, Natwar Nagar,
Road no.2, Jogeshwari (East),
Mumbai 400 060.
44 Other directorships
1. Amal Limited;
2. Amrit Banaspti Company Limited;
3. Gitanjali Gems Limited;
4. Hindoostan Mills Limited;
5. Hindoostan Technical Fabrics Limited;
6. i-Process Services (India) Private
Limited;
7. Keynote Corporate Services Limited;
8. Pramerica Trustees Private Limited;
9. Reliance Asset Reconstruction Company
Limited;
10. Rudolf Atul Chemicals Limited;
11. Sabero Organics Gujarat Limited; and
12. SSPA Consultants Private Limited
Partnerships
1. SSPA & Associates; and
2. SSPA & Co.
Anil Sekhri
Father’s name: Avtarkrishan Sekhri
Designation: Non-Executive
Independent Director
Term: Liable to retire by rotation
DIN: 00506790
Occupation: Professional
Nationality: Indian
Address:
23-A, Krishna Kunj, Opp. Millat
Nagar, Off New Link Road, Andheri
(West), Mumbai 400 053.
53 Other directorships
1. ND S Art World Private Limited;
2. Reliance Broadcast Network Limited;
3. Sprint Tours & Travels Private Limited;
4. Reliance MediaWorks Entertainment
Services Limited;
5. Reliance MediaWorks Theatres Limited;
and
6. Big Synergy Media Limited
Proprietorships
1. Anil Sekhri & Co.
HUF
1. Avtar HUF
Prasoon Joshi
Father’s name: Devendra Kumar
Joshi
Designation: Non-Executive
45 Other directorships
1. McCann Erickson India Private Limited;
2. Result Services Private Limited;
3. Associated Corporate Consultants India
Private Limited; and
214
Name, Father‟s Name, Designation,
Term, DIN, Occupation, Nationality
and Address
Age
(in years)
Other Directorships/Partnerships/Trusts in
which our Director is a trustee
Independent Director
Term: Liable to retire by rotation
DIN: 01260545
Occupation: Service
Nationality: Indian
Address:
201-202, B Wing, Quantum Park
Building, Union Park, Khar (West)
Mumbai 400 052.
4. Reliance Broadcast Network Limited.
Relationship with Other Directors
None of our Directors are related to one another.
Brief Biographies
Gautam Doshi, aged 60 years, has been a Director since October 7, 2005. He holds a master‟s degree in
commerce from the University of Mumbai, Mumbai. He is also a fellow member of the Institute of Chartered
Accountants of India. He has 36 years of experience in areas such as mergers and acquisitions, income-tax,
international taxation, accounting, auditing, finance, banking, legal and general management. He was a
senior partner in RSM & Co. and was a founder director of Ambit Corporate Finance Private Limited. He is
currently the group managing director of the Reliance Group.
Amit Khanna, aged 62 years, has been a Director since April 26, 2007. He holds a bachelor‟s degree in arts
from St. Stephen‟s College, New Delhi. He has nearly 40 years of experience in areas such as film
production, script writing, lyrics writing, direction, theatre, radio, films, journalism and television
programming. He has held the position of the president, All India Film Producers Council, president, Film
and Television Producers Guild of India Limited and vice-president, Association of Motion Picture and TV
Program Producers. He has also been on the governing council of the film institutes situated in Pune and
Kolkata. He was the first Indian to serve on the jury of International Emmy. He has also been on the jury of
various film festivals and awards in India and abroad. Besides serving on various international, government
and trade organizations and institutions, he has also won several awards.
Sujal Shah, aged 44 years, has been a Director since April 26, 2007. He holds a bachelor‟s degree in
commerce from University of Mumbai, Mumbai. He is also a chartered accountant by qualification and is a
member of the Institute of Chartered Accountants of India. He has approximately 20 years experience in the
field of accounting and corporate consultancy practice including mergers and acquisitions, restructuring of
companies, valuation of business/shares, due diligence review. He was the president of the Chamber of Tax
Consultants for the year 2010-2011 and is a founder partner of SSPA & Co., Chartered Accountants.
Anil Sekhri, aged 53 years, has been a Director since September 13, 2007. He holds a bachelor‟s degree in
commerce from Punjab University, Chandigarh. He is also a fellow member of the Institute of Chartered
Accountants of India. He has over 26 years of experience in the areas such as accounting, taxation and legal
matters with focus on media and entertainment sector. He is the founder of Anil Sekhri & Co., Chartered
Accountants.
215
Prasoon Joshi, aged 45 years, has been a Director since September 3, 2009. He holds a bachelor‟s degree in
science from University of Meerut, Meerut a master‟s degree in science (physics) from Meerut University,
Meerut and a master‟s degree in business administration in marketing from the Institute of Management
Technology, Ghaziabad. He has over 18 years of experience in areas such as advertising, song writing,
poetry and communication. He has received approximately 400 national and international awards and honors.
He is currently the executive chairman of McCann Worldgroup, India.
None of our Directors is or was a director of any listed company during the last five years preceding the date
of filing of this Draft Letter of Offer, whose shares have been or were suspended from being traded on the
BSE or the NSE, during the term of their directorship in such company.
None of our Directors is or was a director of any listed company which has been or was delisted from any
recognised stock exchange in India during the term of their directorship in such company.
Remuneration of our Directors
The remuneration paid to our Directors during the 18 months ended September 30, 2012 is as follows:
1. Executive Directors
Our Company does not have any executive Director. Ashish Agarwal, though, is the Manager of our
Company in terms of the Companies Act.
2. Non-Executive Directors
The following table sets forth the details of sitting fees and commission paid to the non-executive Directors
during the 18 months ended September 30, 2012:
(in `)
Name 18 months ended September 30, 2012
Sitting fees Commission and others
Gautam Doshi 50,000 Nil
Amit Khanna 1,80,000 Nil
Sujal Shah 2,05,000 Nil
Anil Sekhri 2,05,000 Nil
Prasoon Joshi 1,20,000 Nil
Ajay Prasad * 30,000 Nil *Ajay Prasad has resigned w.e.f April 10, 2012.
Except as stated in this section and the sitting fees paid in Fiscal 2012, no amount or benefit has been paid
within the two preceding years or is intended to be paid or given to any of our Company‟s officers including
our Directors and key management personnel.
None of the beneficiaries of loans, advances and sundry debtors are related to our Directors. Further, except
statutory benefits and contractual payments like gratuity and leave encashments, upon termination of their
employment in our Company or retirement, no officer of our Company, including our Directors and our key
management personnel, are entitled to any benefits upon termination of employment.
No loans have been availed by our Directors from our Company. Except Krishnanand Shetty, none of the key
managerial personnel has availed any loan from our Company.
Service Contracts with our Directors
We have not entered into any service contracts with our Directors entitling them to any benefits on
termination of employment or otherwise.
216
Service Agreement with the Manager
Pursuant to Board resolution dated July 1, 2011, Ashish Agarwal was appointed as a Manager of our
Company with effect from July 1, 2011.
A service agreement has been entered into by our Company with Ashish Agarwal on July 1, 2011 (Service
Agreement) in relation to his appointment as the Manager with effect from July 1, 2011 for a period of five
years, i.e. upto June 30, 2016 with a remuneration of `24 lakhs per annum.
The Service Agreement shall expire on June 30, 2016. Either party may terminate the Service Agreement
with one month prior notice.
His DIN is 01598849.
Shareholding of Directors
None of our Directors hold any Equity Shares in our Company.
Borrowing Powers of our Board of Directors
Pursuant to a resolution passed by the shareholders of our Company on October 25, 2007, and in accordance
with the provisions of the Companies Act, the Board is authorised to borrow from time to time, any sum or
sums of money, upon such terms and conditions and with or without security, in Indian/foreign currency, as
our Board may in its discretion think fit, notwithstanding that the money or monies to be so borrowed by us
(excluding the temporary loans obtained or to be obtained from our Company‟s bankers in the ordinary
course of business) together with the sums already borrowed, may exceed the aggregate of our paid-up
capital and free reserves, provided the sums so borrowed shall not, at any time, exceed `5,00,000 lakhs.
Corporate Governance
Our Company is in compliance with the applicable corporate governance requirements, including under the
Equity Listing Agreements, the Companies Act and other applicable laws and regulations. The corporate
governance framework is based on an effective independent Board, separation of the Board‟s supervisory
role from the executive management team and constitution of committees of the Board, as required under
law.
Committees of the Board of Directors
The Board has constituted committees of Directors, each of which functions in accordance with the relevant
provisions of the Companies Act and the Equity Listing Agreements. These include, (i) Audit Committee,
(ii) Shareholders‟ and Investors‟ Grievance Committee, (iii) Remuneration Committee, and (iv) Committee
of Directors. The details of these committees are as follows:
A. Audit committee
The members of the Audit Committee are:
1. Sujal Shah;
2. Amit Khanna;
3. Anil Sekhri;
4. Gautam Doshi; and
5. Prasoon Joshi.
217
The Audit Committee was re-constituted by a resolution passed by the Board of Directors in its
meeting held on May 15, 2012. The terms of reference of the Audit Committee are as provided in
Clause 49 of the Equity Listing Agreements, as well as Section 292A of the Companies Act,
including overview of the accounting systems, correctness of the financial reporting and internal
controls of our Company.
B. Shareholders‟ and Investors‟ Grievance Committee
The members of the Shareholders‟ and Investors‟ Grievance Committee are:
1. Gautam Doshi;
2. Amit Khanna; and
3. Prasoon Joshi.
The Shareholders‟ and Investors‟ Grievance Committee was re-constituted by a meeting of our
Board held on October 22, 2009. The terms of reference of the Shareholders‟ and Investors‟
Grievance Committee include investigation into any matter relating to redressing shareholders‟
and/or investors‟ complaints pertaining to transfer of shares, non-receipt of balance sheet, non-
receipt of declared dividend, duplicate share certificates and dematerialization or rematerialization
of shares.
C. Nomination / Remuneration Committee
The members of the Nomination / Remuneration Committee are:
1. Anil Sekhri;
2. Gautam Doshi;
3. Amit Khanna; and
4. Sujal Shah.
The name of Remunation Committee was changed to Nomination/ Remuneration Committee in the
meeting of Board of Directors held on November 03, 2012. The Nomination/ Remuneration
Committee was re-constituted by a circular resolution passed by the Board of Directors on June 9,
2010. The powers, duties and terms of reference of the Remuneration Committee include reviewing
the overall compensation policy and structure, service agreements and other employment conditions
for the members of the board.
D. Committee of Directors
The members of the Committee of Directors are:
1. Amit Khanna;
2. Sujal Shah; and
3. Anil Sekhri.
The above Committee of Directors was constituted by a meeting of our Board held on July 25,
2012. The powers, duties and terms of reference of the Committee of Directors include, inter alia,
fixing a record date for the purpose of the issue, finalizing the size of issue and issue price, deciding
the opening and closing dates for the rights issue, approving and adopting the draft letter of offer,
letter of offer, application form and such other as documents as may be required, issuing and
allotting the shares in one or more tranches and to do all such acts and deeds necessary or desirable
in connection with or incidental to the issue of the shares and dispose of the balance unsubscribed
portion of the right issue, if any, to our Promoters and/or any person(s) or institution(s) as it thinks
218
most beneficial to our Company, subject to such regulations, if any, as may be applicable.
Interests of our Directors
All of our Directors, including our independent Directors, may be deemed to be interested to the extent of
fees, if any, payable to them for attending meetings of the Board or a committee thereof, as well as to the
extent of other remuneration and reimbursement of expenses, if any, payable to them under our Articles of
Association. All our non-executive Directors are entitled to sitting fees of as set out at page 215 above. Our
Directors, including independent Directors, may also be regarded as interested in the Equity Shares held by
the companies, firms and trust, in which they are interested as directors, members, partners or trustees.
Our Directors, including independent Directors, may also be regarded as interested to the extent Equity
Shares are allotted to entities in which they are interested as directors, members, partners or trustees. Further,
Mrs. Geeta Serkhri, wife of Anil Sekhri, one of our Directors holds 1 (one) Equity Share. Anil Sekhri can be
considered interested in our Company to extent of Equity Shares held by Mrs. Geeta Sekhri.
All Directors may be deemed to be interested in the contracts, agreements / arrangements entered into or to
be entered into by our Company with any company in which they hold directorships or any partnership firm
in which they are partners as declared in their respective declarations.
Except as stated above, none of our Directors are interested in the promotion of our Company nor have any
of them acquired any property in 2 years preceding the date of the Draft Letter of Offer.
Except as otherwise stated in the chapter entitled “Financial Statements”, our Company has not entered into
any contract, agreements or arrangements during the two years preceding the date of this Draft Letter of
Offer, in which our Directors are interested directly or indirectly and no payments have been made to them in
respect of such contracts, agreements or arrangements.
Bonus or profit sharing plan for our Directors
Our Company does not have any bonus or profit sharing plan for its Directors.
Changes in our Board of Directors during the last three years:
Name Date of Appointment/ Change/
Cessation
Reason
Pradeep Shah September 3, 2009 Resignation
Prasoon Joshi September 3, 2009 Appointment as additional director,
regularized on September 30, 2009
Ajay Prasad February 15, 2010 Appointment as additional director,
regularized on August 31, 2010
Darius Kakalia June 9, 2010 Resignation
Ajay Prasad April 10, 2012 Resignation
219
Management Organisation Structure
Key Managerial Personnel of our Company
Ashok Ganapathy, Chief Executive Officer - Exhibition, aged 46 years, joined our Company in May 2011.
He holds a post graduate diploma in business management from Indian Institute of Management,
Ahmedabad. Prior to joining our Company, he held the position of Senior Vice President - Operation with
Spencer‟s Retail Limited, RPG group and has also worked with Hindustan Unilever Limited. He has
approximately 21 years of experience in sales, marketing, business management and operations. During
Fiscal 2012, he was paid a gross compensation of `115.83 lakhs.
Venkatesh Roddam, Chief Executive Officer – Film & Media Services, aged 49 years, joined our Company
in January 2012. He holds a degree in Masters of Business Administration. Prior to joining our Company, he
held the position of Executive Director, with VenSat Technology Services Private Limited, and has also
worked with companies like Annapurna Studios, Mahindra Satyam BPO & Deutsche Bank. He has
approximately 25 years of experience in managing large scale operations, sales, marketing & business
management. During Fiscal 2012, he was paid a gross compensation of `112.50 lakhs.
Ashish Saksena, Chief Operating Officer - Exhibition, aged 46 years, joined our Company in September
2009. He holds a bachelor's degree in Technology (Mechanical) from University of Calicut and post graduate
diploma in management from IGNOU. Prior to joining our Company, he held the position of CEO with PVR
Film & Media Services
CEO
Venkatesh Roddam
Exhibition Ops
CEO
Ashok Ganapathy
Group Financial
Controller
Mohan Umrotkar
India Business International Business
Processing & DI
Lab
President
Krishnanand Shetty
Production Services
& Broadcast
Solutions
President
Ashish Chakravorty
Media & Creative
Services
(US & UK)
President
Naresh Malik
International Ops
I Lab, London
RMW, Burbank
Chief Human
Resources Officer
Shiana Makhija
Big Synergy
Chairman&MD
Siddhartha Basu
Board of Directors
Ashish Agarwal
Company Secretary & Manager
Media & Creative
Services
President
Naresh Malik
US
COO
Ashish Saksena
India
220
Limited and has also worked with Inox Leisure. He has approximately 24 years of experience in production,
distribution, programming and cinema operations. During Fiscal 2012, he was paid a gross compensation of
` 132.50 lakhs.
Krishnanand Shetty, President – Processing & DI Lab, aged 59 years, joined our Company in April 1999.
He holds a bachelor's degree in science from University of Mumbai, Mumbai. Prior to joining our Company
he has worked with Quality Cine Lab. He has approximately 35 years of experience in the media and
entertainment industry. During Fiscal 2012, he was paid a gross compensation of `150.00 lakhs. Although
Krishnanand Shetty was supposed to retire on February 20, 2012, by a letter dated February 1, 2012, his
services were extended for a further period of two years.
Ashish Chakravorty, President - Production Services & Broadcast Solutions, aged 47 years, joined our
Company in January 2008. He holds a bachelor's degree in economics from University of Mumbai, Mumbai.
Prior to joining our Company he has worked with Zee Entertainment Enterprises Limited and Universal
Music. He has approximately 23 years of experience in various fields such as marketing, advertising and
music. During Fiscal 2012, he was paid a gross compensation of `135.00 lakhs.
Naresh Malik, President – Media & Creative Services, aged 46 years, joined our Company in January 2010.
He holds a bachelor‟s degree in engineering (electronics and communication) from Institution of Engineers,
Chennai. Prior to joining our Company he has worked with, inter alia, Century Communication Limited -
Pixion, Ideal System Asia Pacific and Grass Valley Group and has held the position of Chief Executive
Officer in Prime Focus World. He has approximately 20 years of experience in the management and post
production business. During Fiscal 2012, he was paid a gross compensation of `145.33 lakhs.
Mohan Umrotkar, Group Financial Controller, aged 39 years, joined our Company in May 2008. He is a
chartered accountant by qualification. Prior to joining our Company, he was with C.C Choksi & Company.
He has approximately 17 years of experience. He heads our finance and accounts division. During Fiscal
2012, he was paid a gross compensation of `97.50 lakhs.
Shiana Makhija, Chief Human Resources Officer, aged 47 years, joined our Company in January 2011. She
holds a bachelor's degree in arts from University of Mumbai, Mumbai. She also holds masters‟ degree in arts
(social work) from Tata Institute of Social Sciences. She has previously worked with companies such as Blue
Star Limited, Johnson Controls India Private Limited, MIRC Electronics Limited and Reliance Capital
Limited and has held the position of Senior Vice President – Human Resources at Reliance Capital Ltd. She
has approximately 19 years of experience in the field of human resources. During Fiscal 2012 she was paid a
gross compensation of `105.00 lakhs.
Ashish Agarwal, Company Secretary and Manager, aged 39 years, joined our Company in July 2011. He
holds a bachelor's degree in commerce and has obtained a degree in law from Maharshi Dayanand Saraswati
University, Ajmer, Rajasthan. He is also a member of the Institute of Company Secretaries of India. Prior to
our Company he has worked with Aditya Birla Nuvo Limited. He has approximately 14 years of experience
in legal and secretarial area. During Fiscal 2012, he was paid a gross compensation of `45 lakhs.
Except for the Service Agreement with Ashish Agarwal in relation to his appointment as the Manager with
effect from July 1, 2011 for a period of five years, the key management personnel are permanently employed
with our Company as of the date of this Draft Letter of Offer.
None of the key management personnel are related to each other.
Brief details of the general employment contract of key management personnel of our Company
Our Company has entered into general employment contracts with our key management personnel. A
summary of the terms of these general employment contracts is set out below:
221
The key management personnel are subject to an initial probation period of six months. Either party may
terminate the contract during this period, after giving a notice for a period of 15 days, without assigning any
reason. The appointment and continuation of the key management personnel is subject to them being found
medically fit to be employed. The age of retirement is 58 years.
The key management personnel is prohibited from disclosing any secret, processes, methods, designs and
any intellectual property of our Company along with any other information relating to our Company gathered
during the course of their employment. Any inventions, discoveries, intellectual property designed or
developed would become our Company‟s exclusive property.
After completion of probation period, normally either party may terminate the contract after giving a notice
of one month. Our Company may terminate the contract, without a notice, if the particulars provided by the
applicant in the application are incomplete or incorrect. Also, if there is any misconduct or fraudulent activity
on part of the employee, the services can be terminated.
Shareholding of key managerial personnel
Except Krishnanand Shetty and Ashish Chakravorty, who hold 150 Equity Shares and 100 Equity Shares,
respectively, in our Company, none of our key managerial personnel hold Equity Shares of our Company.
Interest of Key Managerial Personnel
Except to the extent of their shareholding in our Company, and remuneration or benefits to which they are
entitled as per the terms of their appointment and reimbursement of expenses incurred by them in the
ordinary course of business, our Company‟s key managerial personnel do not have any other interest in our
Company.
Bonus or profit sharing plan of the key management personnel
None of the key management personnel are entitled to any profit sharing plan.
Changes in the key management personnel
The changes in the key management personnel in the last three years are as follows:
Name Designation Date of change Reason for
change
Naresh Malik Chief Operating Officer - Creative Services January 18,
2010
Appointment
Shiana Makhija Chief Human Resources Officer January 3, 2011 Appointment
Ashok
Ganapathy
Chief Executive Officer – Exhibition May 5, 2011 Appointment
Kirti Desai Company Secretary and Manager May 15, 2011 Resignation
Madhulika
Singh
Manager May 28, 2011 Appointment
Madhulika
Singh
Manager July 1, 2011 Resignation
Ashish Agarwal Company Secretary and Manager July 1, 2011 Appointment
Venkat
Devarajan
Chief Financial Officer December 16,
2011
Resignation
Tushar Dhingra Chief Operating Officer – Exhibition (North, East
& Central)
December 31,
2011
Resignation
Shankar Dutta President – Motion Pictures & Allied Services December 31,
2011
Resignation
222
Name Designation Date of change Reason for
change
Venkatesh
Roddam
Chief Executive Officer – Film & Media Services January 2, 2012 Appointment
Anil Arjun Chief Executive Officer September
30,2012
Resignation
Anantha
Krishnan
Vice President - Technology February 28,
2013
Resignation
Employees
Employee Stock Option Scheme
The shareholders of our Company pursuant to a resolution passed at the AGM held on August 31, 2010
have in terms of section 81(1A) of the Companies Act and the SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999, accorded their consent to our Board of Directors to
introduce and implement the Reliance MediaWorks Employee Stock Option Scheme (“ESOS Scheme”).
As on the date of this Draft Letter of Offer, our Company has not granted any ESOS Securities under the
aforesaid scheme.
Payment or Benefit to Officers of our Company (non salary related)
Except as stated above, no amount or benefit (non salary related) has been paid within the two preceding
years or is intended to be paid or given to any of our Company‟s officers including our Directors and key
management personnel, including benefits in kind for all capacities and contingent or deferred compensation.
Further, except statutory benefits upon termination of their employment in our Company or retirement, no
officer of our Company, including our Directors and our key management personnel, are entitled to any
benefits upon termination of employment.
223
OUR PROMOTER AND PROMOTER GROUP
Promoters
Reliance Land Private Limited and Reliance Capital Limited are the Promoters of our Company.
1. Reliance Land Private Limited
Reliance Land Private Limited was incorporated as Reliance Homes Limited, a public limited company,
under the Companies Act on December 23, 1993. The company received a certificate of commencement of
business on January 3, 1994. Subsequently, the name of the company was changed to Reliance Land Limited
pursuant to which a fresh certificate of incorporation dated May 25, 1995 was issued by the Registrar of
Companies. Pursuant to the conversion of the company into a private limited company, the name was
changed to Reliance Land Private Limited on September 7, 2001.
Reliance Land Private Limited is involved in the business of real estate.
The registered office of Reliance Land Private Limited is situated at H Block, 1st Floor, Dhirubhai Ambani
Knowledge City, Navi Mumbai 400 710.
Board of directors
The board of directors of Reliance Land Private Limited comprises of:
1. Achuthan Kothandath; and
2. Vinod Kumar Tripathi.
Shareholding pattern
Shareholding pattern of Reliance Land Private Limited as of December 31, 2012 is as follows:
Name of Shareholder No. of Equity Shares Held % of shareholding
Reliance Capital Limited 50,00,000 50.00
Reliance Share & Stock Brokers
Private Limited
50,00,000 50.00
Total 1,00,00,000 100.00
Unconsolidated Financial performance
(In ` lakhs, except share data)
Particulars As at and for the
nine month period
ended March 31,
2010(1)
As at and for the
year ended March
31, 2011
As at and for the
year ended March
31, 2012
Sales & Other Income 31.34 41.47 17.11
PAT (185.09) 115.29 (157.20)
Equity Capital 1,000.00 1,000.00 1,000.00
Reserves 33,887.54 30,852.83 37,195.62
Basic and Diluted EPS (in `)(2)
(2.45) 1.15 (1.57)
Net asset value per share (in `)(3)
348.88 318.53 381.96 (1)
The financial year of Reliance Land Private Limited beginning on July 1st of every year and ending on March 31st of the next year
was changed to begin on April 1st of every year and end on March 31st of the next year, pursuant to a resolution dated March 12, 2010
passed by its Board of Directors. Accordingly, the financial year 2010 commenced on July 1st 2009 and was a nine month period ending on March 31, 2010.
224
(2) Excluding preference dividend
(3) Excluding reserves earmarked for preference share redemption
Promoters of Reliance Land Private Limited
Reliance Capital Limited is the promoter of Reliance Land Private Limited. The directors of Reliance Capital
Limited are as follows:
1. Anil Dhirubhai Ambani;
2. Amitabh Jhunjhunwala;
3. Rajendra Prabhakar Chitale;
4. Dr. Bidhubhusan Samal; and
5. Vijayendra Nath Kaul.
There has been no change in the control or the management of Reliance Land Private Limited in the three
years preceding the date of this Draft Letter of Offer.
Our Company confirms that the permanent account number, bank account number, company registration
number and the address of the Registrar of Companies where Reliance Land Private Limited is registered
shall be submitted to the Stock Exchanges at the time of filing this Draft Letter of Offer.
2. Reliance Capital Limited
Reliance Capital Limited was incorporated as Reliance Capital & Finance Trust Limited under the
Companies Act on March 5, 1986. The company received a certificate of commencement of business on
March 27, 1986. Subsequently, the name of the company was changed to Reliance Capital Limited, pursuant
to which a fresh certificate of incorporation dated January 6, 1995 was issued by the Registrar of Companies.
Reliance Capital Limited is a non-banking financial company registered with the Reserve Bank of India
under section 45-IA of the RBI Act, 1934. Reliance Capital Limited has interests in asset management,
mutual funds, portfolio management services, pension funds, life and general insurance, private equity and
proprietary investments, stock broking and depository services, investment banking, wealth management,
home and commercial finance, financial products distribution, venture capital, exchanges, asset
reconstruction and other activities in financial services.
The registered office of Reliance Capital Limited is situated at H Block, 1st Floor, Dhirubhai Ambani
Knowledge City, Navi Mumbai 400 710, India.
Board of directors
The board of directors of Reliance Capital Limited comprises of:
1. Anil Dhirubhai Ambani;
2. Amitabh Jhunjhunwala;
3. Rajendra Prabhakar Chitale;
4. Dr. Bidhubhusan Samal; and
5. Vijayendra Nath Kaul
225
Shareholding Pattern
The shareholding pattern of Reliance Capital Limited as of December 31, 2012 is as follows:
Categor
y Code
( I )
Category of
Shareholder
( II )
No of
Shareholder
s ( III )
Total No of
Shares
( IV )
Number of
shares held in
dematerilised
Form
( V )
Total
Shareholdi
ng as
percentage
of total
number of
shares
Shares
Pledged
or
otherwi
se
encumb
ered
As a
percentage
of (A+B) (
VI )
As a
percent
age of
(A+B+
C) (
VII )
(A)
Shareholding of
Promoter and
Promoter Group
(1) Indian
(a) Individuals/Hindu
Undivided Family 9 11,65 ,983 11,65 ,983 0.48 0.47
(b)
Central
Government/State
Governments
- - - - -
(c) Bodies Corporate 9 13,02,16,289 13,02,16,289 53.12 53.01
(d) Financial
Institutions/Banks - - - -
-
(e) Any Other
(Specify) 1 16,00,000 16,00,000 0.65 0.65
Sub -Total (A)(1) 19 13,29,82,272 13,29,82,272 54.25 54.14
(2) Foreign
(a)
Individuals(Non-
Resident
Individuals/Foreig
n Individuals)
- - - -
-
(b) Bodies Corporate - - - -
-
(c) Institutions - - - -
-
(d) Qualified Foreign
Investor - - - -
-
(e) Any Other
(Specify) - - - -
-
Sub -Total (A)(2) - - - -
-
Total
shareholding of
Promoter and
Promoter Group
(A)=(A)(1)+(A)(2
)
19 13,29,82,272 13,29,82,272 54.25 54.14
226
Categor
y Code
( I )
Category of
Shareholder
( II )
No of
Shareholder
s ( III )
Total No of
Shares
( IV )
Number of
shares held in
dematerilised
Form
( V )
Total
Shareholdi
ng as
percentage
of total
number of
shares
Shares
Pledged
or
otherwi
se
encumb
ered
As a
percentage
of (A+B) (
VI )
As a
percent
age of
(A+B+
C) (
VII )
(B) Public
Shareholding
(1) Institutions
(a) Mutual Funds
/UTI 200 48,28,781 47,64,484 1.97 1.97
(b) Financial
Institutions/Banks 284 4,51,018 4,36,353 0.18 0.18
(c)
Central
Government/State
Governments
54 47,066 3361 0.02 0.02
(d) Venture Capital
Funds - - - -
-
(e) Insurance
Companies 18 1,08,62,082 1,08,61,927 4.43 4.42
(f)
Foreign
Institutional
Investors
511 4,91,71,755 4,91,65,935 20.06 20.02
(g) Foreign Venture
Capital Investors - - - -
-
(h) Qualified Foreign
Investor - - - -
-
(I) Any Other
(Specify) - - - -
-
Sub -Total (B)(1) 1,067 6,53,60,702 6,52,32,060 26.66 26.61
(2) Non-Institutions
(a) Bodies Corporate 5734 73,53,740 72,71,974 3.00 2.99
(b)
i. Individual
shareholders
holding nominal
share capital up to
`1 Lakh.
11,45,952 3,50,06,803 2,99,09,140 14.28 14.25
ii. Individual
shareholders
holding nominal
share capital in
excess of `1Lakh.
55 31,72,406 31,49,906 1.29 1.29
(c) Qualified Foreign
Investor - - - - -
(d) Any Other
(Specify)
227
Categor
y Code
( I )
Category of
Shareholder
( II )
No of
Shareholder
s ( III )
Total No of
Shares
( IV )
Number of
shares held in
dematerilised
Form
( V )
Total
Shareholdi
ng as
percentage
of total
number of
shares
Shares
Pledged
or
otherwi
se
encumb
ered
As a
percentage
of (A+B) (
VI )
As a
percent
age of
(A+B+
C) (
VII )
1 NRIs/OCBs 13,307 12,43,491 10,42,630 0.51 0.51
Sub -Total (B)(2) 11,65,048 4,67,76,440 4,13,73,650 19.08 19.04
Total Public
Shareholding
B=(B)(1)+(B)(2)
11,66,115 11,21,37,142 10,66,05,710 45.75 45.65
TOTAL (A) +(B) 11,66,134 24,51,19,414 23,95,87,982 100.00 99.79
(C)
Shares held by
Custodians and
against which
Depository
Receipts have
been issued
1 Promoter and
Promoter Group 0 0 0 0.00 0.00
2 Public 1 5,13,386 5,13,386 0.00 0.21
Sub - Total (C ) 1 5,13,386 5,13,386 0.00 0.21
GRAND TOTAL
(A)+(B)+(C) 11,66,135 24,56,32,800 24,01,01,368 100.00 100.00
Unconsolidated Financial Performance
The brief financial details of Reliance Capital Limited derived from its audited financial statements, prepared
on a standalone basis, are set forth below:
(In ` lakhs, except share data)
Particulars As at and for
the year
ended March
31, 2010
As at and for the
year ended March
31, 2011
As at and for
the year
ended March
31, 2012
Sales & Other Income 2,38,988.00 1,97,126.43 3,31,733.53 PAT 33,942.00 22,927.00 51,924.58 Equity Capital 24,616.00 24,616.00 24,616.00 Reserves (excluding revaluation reserves)* 6,63,952.57 6,71,208.89 10,66,374.01 Basic & Diluted EPS (in `) 13.82 9.33 21.14 Book value per share (in `) 280.32 283.28 444.15 * Reserves are net of miscellaneous expenditure to the extent not written off.
There has been no change in the control or the management of Reliance Capital Limited in the three years
preceding the filing of this Draft Letter of Offer.
228
Our Company confirms that the permanent account number, bank account number, company registration
number and the address of the Registrar of Companies where Reliance Capital Limited is registered shall be
submitted to the Stock Exchanges at the time of filing this Draft Letter of Offer.
Promoters of Reliance Capital Limited
The promoters of Reliance Capital Limited are as follows:
Individual promoters:
1. Kokila Dhirubhai Ambani;
2. Anil Dhirubhai Ambani;
3. Tina Anil Ambani;
4. Jaianmol Anil Ambani; and
5. Jaianshul Anil Ambani (through father and natural guardian Anil Dhirubhai Ambani).
Corporate promoters:
1. AAA Enterprises Private Limited;
2. AAA Infrastructure Consulting & Engineers Private Limited;
3. REL Utility Engineers Limited (formerly known as Sonata Investments Limited);
4. Reliance ADA Group Trustees Private Limited - Trustees of RCAP ESOS Trust; and
5. Reliance Innoventures Private Limited.
Natural person in control of the corporate promoters:
The natural person in control of the corporate promoters of Reliance Capital Limited is Anil Dhirubhai
Ambani.
Interests of Promoters
Our Promoters are interested in our Company to the extent of their shareholding, dividend received and
interest received on the loans given to us. For details on the shareholding of our Promoters in our Company,
please see the chapter entitled “Capital Structure” at page 70. For details of loans given by Reliance Capital
Limited, please see the chapter entitled “Financial Indebtedness” at page 254.
Our Promoters do not have any interest in the property acquired by our Company within two years preceding
the date of this Draft Letter of Offer or proposed to be acquired by our Company.
Reliance Capital Limited has provided a corporate guarantee in favour of Axis Trustee Services Limited for
an amount of `35,000 lakhs for the Non Convertible Debentures issued by our Company to Yes Bank for an
aggregate amount of `35,000.00 lakhs. As of January 31, 2013, the said corporate guarantee is valid and
subsisting. For further details in relation to Non Convertible Debentures issued by our Company, please see
the chapter entitled “Financial Indebtedness” at page 254.
Reliance Capital Limited has provided a corporate guarantee in favour of ICICI Bank Limited for an amount
of `3,766.63 lakhs for the non-fund based facility availed from ICICI Bank Limited. The said guarantee was
valid and subsisting as of January 31, 2013. For further details please see chapter entitled “Financial
Indebtedness” at page 254.
Payment of benefits to our Promoters or Promoter Group
Except as stated in the chapter entitled “Financial Statements” at page F1, there has been no payment of
229
benefits to our Promoters or Promoter Group during the two years preceding the filing of this Draft Letter of
Offer.
Confirmations
None of our Promoters have been declared as a willful defaulter by the RBI or any other government
authority and there are no violations of securities laws committed by our Promoters in the past and no
proceedings for violation of securities laws are pending against them.
Further, none of our Promoters or our Promoter Group or our Directors has been restrained from accessing
the capital markets for any reasons by SEBI or any other entity.
Companies with which our Promoters have disassociated in the last three years
Except as disclosed below, our Promoters have not disassociated from any company during the preceding
three years from the date of this Draft Letter of Offer:
Reliance Capital Limited has disassociated from Medybiz Private Limited, Net Logistics Private Limited,
Reliance Capital Services Private Limited and Reliance Infrastructure Finance Private Limited as a result of
sale of shares held by Reliance Capital Limited in these companies. Reliance Commercial Finance Private
Limited and Viscount Management Services (Alpha) Limited have been amalgamated with Reliance Capital
Limited.
Change in the management and control of our Company
Other than as disclosed in this Draft Letter of Offer, there has been no change in the management and control
of our Company.
Promoter Group
In addition to our Promoters, the following persons form part of our Promoter Group i.e. part of the Reliance
Group:
1. AAA Enterprises Private Limited;
2. AAA Infrastructure Consulting & Engineers Private Limited;
3. Adhar Project Management & Consultancy Private Limited;
4. Ammolite Holdings Limited;
5. Emerging Money Mall Limited;
6. Indian Agri Services Private Limited;
7. Indian Commodity Exchange Limited;
8. Payone Enterprise Private Limited (formerly known as Ashadeep Properties Private Limited);
9. QOPPA Trading Private Limited;
10. Quant Alternative Asset Management Private Limited;
11. Quant Broking Private Limited;
12. Quant Capital Advisors Private Limited;
13. Quant Capital Finance and Investments Private Limited;
14. Quant Capital Private Limited;
15. Quant Commodities Private Limited;
16. Quant Commodity Broking Private Limited;
17. Quant Investment Services Private Limited;
18. Quant Securities Private Limited;
19. QCAP Trade Private Limited (formerly Valankulam Investments and Trading Private Limited)
20. Reliance Alternative Investments Services Private Limited;
21. Reliance Asset Management (Malaysia ) Sdn. Bhd.;
230
22. Reliance Asset Management (Mauritius) Ltd.;
23. Reliance Asset Management (Singapore) Pte Limited;
24. Reliance Asset Reconstruction Co. Limited;
25. Reliance Broadcast Network Limited;
26. Reliance Capital (Singapore) Pte. Limited;
27. Reliance Capital Asset Management (UK) Plc.;
28. Reliance Capital Asset Management Limited;
29. Reliance Capital Pension Fund Limited;
30. Reliance Capital Trustee Co. Limited;
31. Reliance Commodities Limited;
32. Reliance Composite Insurance Broking Limited
33. Reliance Consultants (Mauritius) Ltd;
34. Reliance Equities International Private Limited;
35. Reliance Equity Advisors (India) Limited;
36. Reliance Exchangenext Limited;
37. Reliance Financial Limited;
38. Reliance General Insurance Company Limited;
39. Reliance Gilts Limited;
40. Reliance Home Finance Limited (formerly Reliance Home Finance Private Limited);
41. Reliance Innoventures Private Limited;
42. Reliance Investment Banking Services Limited;
43. Reliance Life Insurance Company Limited;
44. Reliance Money Express Limited;
45. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private
Limited);
46. Reliance Net Limited;
47. Reliance AIS Management Company Private Limited (formerly Reliance Realty Private Limited);
48. Reliance Securities Limited;
49. Reliance Share & Stock Brokers Private Limited;
50. Reliance Spot Exchange Infrastructure Limited;
51. Reliance Venture Asset Management Private Limited;
52. Reliance Wealth Management Limited; and
53. Viscount Management Services Limited.
The following entities have not been considered as being part of the Promoter Group for making disclosures
in the DLOF:
Names of the Companies Promoter(s)
Unilizer Media Limited
Unilazer Holdings Limited
TV Today Network Limited
Living Media India Limited
Aroon Purie
Ventura Textiles Limited
Ventura Texports Private Limited
Penny Securities & Investments Limited
Grover Vineyard Limited
Hindustan Export & Import Corporation Private
Limited
Vallee De Vin Private Limited
Neeraj Deorah
Ravinder Kumar Jain
Deepak Roy
231
Menon & Menon Private
Limited
Vijay Menon
Padmini Menon
Satish Menon
Preethi V Menon
K. Parameswaran
Vinod Sridharan
Divya V. Menon
Shreya V. Menon
Reverse Logistics Company
Private Limited
Hitendra Chaturvedi
Savita Chaturvedi
Rationale for not considering the above companies to be part of the Promoter Group:
Reliance Capital Limited (RCL), one of the Promoters of the Issuer, is a registered NBFC with the Reserve
Bank of India. RCL is classified as an “Investment Company” and is engaged in the business of acquisition
and sale of securities. As part of its business RCL invests in various companies from time to time and, on
occasions, holds shares in excess of 10% of such companies. Accordingly, some of these companies come
within the ambit of the definition of Promoter Group in terms of SEBI ICDR Regulations.
RCL‟s shareholding in these companies, though, is only in the nature of investment and these entities are
neither related to RCL nor does RCL have any significant influence or management control over them. These
are purely financial investments with an intention to sell in near future.
We further confirm that none of the promoters as mentioned above are related to Reliance Group.
Natural person in control of the Promoters
Mr. Anil Dhirubhai Ambani is the promoter of our Promoters.
Mr. Anil Dhirubhai Ambani, age 53 years, is the promoter of our Promoters. He holds
a Bachelor‟s Degree in Science from the University of Bombay and a Master‟s Degree
in Business Administration from the Wharton School, University of Pennsylvania,
USA. Mr. Ambani is also the Chairman of Reliance Communications Limited,
Reliance Capital Limited, Reliance Infrastructure Limited and Reliance Power Limited.
He is also on the Board of Reliance Infratel Limited and Reliance Anil Dhirubhai
Ambani Group Limited. He is a member of the Wharton Board of Overseers, the
Wharton School, USA, the Board of Governors of the Indian Institute of Management
(IIM), Ahmedabad and Executive Board, Indian School of Business (ISB), Hyderabad.
Mr. Ambani is also the Chairman of the Board of Governors of Dhirubhai Ambani
Institute of Information and Communication Technology, Gandhinagar, Gujarat.
Awards and Achievements
As one of the India‟s youngest business leaders, Mr. Anil Dhirubhai Ambani has received national and
international acclaim for his vision and leadership. Certain awards and recognitions include:
2. Ranked 4th
amongst India‟s Top 100 CEOs by The Economic Times, India in 2010 and in 2009;
3. Included in its selection of 50 notable business leaders from emerging markets in 2010 by the UK-
based Financial Times;
4. Ranked as the third most powerful and influential person of India in its list of 50 such luminaries by
India Today magazine in 2009;
232
5. Also included in a similar list by the US-based Business Week magazine in 2009;
6. Awarded by Light Readings as the Person of the Year – 2008 for outstanding achievements in the
communication industry;
7. Voted „The Businessman of the Year‟ in a poll conducted by The Times of India – TNS, December,
2006;
8. Voted the „Best role model‟ among business leaders in the biannual Mood of the Nation poll
conducted by India Today magazine, August 2006;
9. Conferred with „the CEO of the Year 2004‟ award at the Platts Global Energy Awards.
233
OUR GROUP COMPANIES
Unless otherwise stated, none of the companies forming part of Group Companies is a sick company under
the meaning of SICA and none of them are under winding up. Further, except Reliance Broadcast Network
Limited, all our Group Companies are unlisted companies and they have not made any public issue of
securities in the preceding three years.
None of our Group Companies, for which an application was made to the Registrar of Companies for striking
off the name of the company during the five years preceding the date of filing this Draft Letter of Offer, have
remained defunct.
The Group Companies of our Company are as follows:
Sr.
No.
Name of the company
1. Adhar Project Management & Consultancy Private Limited
2. Ammolite Holdings Limited
3. Emerging Money Mall Limited
4. Indian Agri Services Private Limited
5. Indian Commodity Exchange Limited
6. QOPPA Trading Private Limited
7. Quant Alternative Asset Management Private Limited
8. Quant Broking Private Limited
9. Quant Capital Advisors Private Limited
10. Quant Capital Finance and Investments Private Limited
11. Quant Capital Private Limited
12. Quant Commodities Private Limited
13. Quant Commodity Broking Private Limited
14. Quant Investment Services Private Limited
15. Quant Securities Private Limited
16. QCAP Trade Private Limited (formerly Valankulam Investments and Trading Private Limited)
17. Reliance Alternative Investments Services Private Limited
18. Reliance Asset Management (Malaysia ) Sdn. Bhd.;
19. Reliance Asset Management (Mauritius) Limited
20. Reliance Asset Management (Singapore) Pte Limited
21. Reliance Asset Reconstruction Company Limited
22. Reliance Broadcast Network Limited
23. Reliance Capital (Singapore) Pte. Limited
24. Reliance Capital Asset Management (UK) Plc.
25. Reliance Capital Asset Management Limited
26. Reliance Capital Partners
27. Reliance Capital Pension Fund Limited
28. Reliance Capital Trustee Co. Limited
29. Reliance Commodities Limited
30. Reliance Composite Insurance Broking Limited
31. Reliance Consultants (Mauritius) Ltd.
32. Reliance Equities International Private Limited
33. Reliance Equity Advisors (India) Limited
34. Reliance Exchangenext Limited
35. Reliance Financial Limited
36. Reliance General Insurance Company Limited
37. Reliance Gilts Limited
38. Reliance Home Finance Limited (formerly Reliance Home Finance Private Limited)
39. Reliance Investment Banking Services Limited
234
Sr.
No.
Name of the company
40. Reliance Life Insurance Company Limited
41. Reliance Money Express Limited
42. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private
Limited)
43. Reliance Securities Limited
44. Reliance Share & Stock Brokers Private Limited
45. Reliance Spot Exchange Infrastructure Limited
46. Reliance Venture Asset Management Private Limited
47. Reliance Wealth Management Limited
48. Viscount Management Services Limited
Top five Group Companies
The details of one listed Group Company and the top four Group Companies on basis of turnover are set
forth below:
1. Reliance Broadcast Network Limited
Corporate Information
Reliance Broadcast Network Limited (CIN L64200MH2005PLC158355) was incorporated in India, under
the Companies Act on December 27, 2005 as Reliance Unicom Limited obtained the certificate of
commencement of business on February 13, 2006. The name was changed to Big Radio Limited vide a fresh
certificate of incorporation consequent upon change of name dated October 6, 2006 issued by the Registrar
of Companies. The name of the company was subsequently changed to Reliance Unicom Limited vide a
fresh certificate of incorporation consequent upon change of name dated September 18, 2007 issued by the
Registrar of Companies. The name of the company was again changed to Reliance Media World Limited
vide the fresh certificate of incorporation consequent upon change of name dated July 22, 2009 issued by the
registrar. Subsequently the company‟s name was changed to Reliance Broadcast Network Limited vide the
fresh certificate of incorporation consequent upon change of name dated June 17, 2010 issued by the registrar
of the companies. Reliance Broadcast Network Limited is a media entertainment conglomerate with play
across radio, television, intellectual properties andtelevision production. It is part of the Reliance Group and
specializes in creating and executing integrated media solutions for brands.
Interest of our Promoter
Reliance Capital Limited and Reliance Land Private Limited hold 19.80% and 47.95% interest in Reliance
Broadcast Network Limited, respectively as on January 31, 2013.
Financial Information
The brief financial details of Reliance Broadcast Network Limited derived from its audited standalone
financial statements for financial year September 30, 2010 (i.e. April 1, 2010 to September 30, 2010), March
31, 2011 (i.e. October 1, 2010 to March 31, 2011) and March 31, 2012 (i.e. April 1, 2011 to March 31,
2012) are set forth below:
(` in lakhs, except share data)
Particulars Six month period
ended September 30,
2010(1)
Six month period
ended March 31,
2011(2)
As at and for the
year ended March
31, 2012
Equity Capital 3,972.56 3,972.56 3,972.56
Reserves (excluding revaluation 20,660.89 19,511.22 17558.65
235
Particulars Six month period
ended September 30,
2010(1)
Six month period
ended March 31,
2011(2)
As at and for the
year ended March
31, 2012
reserves)
Sales & other income 11,050.78 14,082.96 31,475.37
Profit After Tax (2,941.73) (1,149.68) (1952.57)
Basic and Diluted EPS (in `) (6.35)* (1.45)* (2.46)
Book value (in `) 31.00 29.56 27.10 (1)
Pursuant to the board resolution dated October 21, 2010, Reliance Broadcast Network Limited closed its books of accounts as of
September 30, 2010 and accordingly the financial year was of six months ending September 30, 2010. (2)
Pursuant to the board resolution dated May 5, 2011, Reliance Broadcast Network Limited closed its books of accounts as of
March 31, 2011 and accordingly the financial year was of six months ending March 31, 2011. * Not annualized. .
Share Price Information
Equity Shares of Reliance Broadcast Network Limited are listed on BSE and NSE.
The monthly high and low of the closing market price of the equity shares of Reliance Broadcast Network
Limited having a face value of `5/- each for the last six months in NSE and BSE is as follows:
BSE
Month Monthly High price in ` Monthly Low price in `
September 2012 52.65 46.05
October 2012 51.00 41.15
November 2012 47.05 40.75
December 2012 49.90 41.30
January 2013 45.95 37.15
February 2013 40.45 27.80
The market capitalisation of Reliance Broadcast Network Limited based on the closing price of `28.05/- per
equity share on the BSE as on February 28, 2013 wass`22,286.05 lakhs.
NSE
Month Monthly High price in ` Monthly Low price in `
September 2012 52.65 46.5
October 2012 50.5 41.3
November 2012 47.15 40.05
December 2012 49.9 42
January 2013 46 37.25
February 2013 39.75 27.85
The market capitalisation of Reliance Broadcast Network Limited based on the closing price of `27.95/- per
equity share on the NSE as on February 28, 2013 was `22,206.60 lakhs.
Changes in capital structure
The Authorised Share Capital of the Company has been altered from `125,00,00,000 (Rupees one hundred
twenty five crore) comprising of 15,00,00,000 (fifteen crore) Equity Shares of `5 (Rupees five) each, and
10,00,00,000 (ten crore) Preference Shares of `5 (Rupees five) each to `150,00,00,000 (Rupees one hundred
fifty crore) comprising of 20,00,00,000 (twenty crore) Equity Shares of `5 (Rupees five) each, and
236
10,00,00,000 (ten crore) Preference Shares of `5 (Rupees five) each by way of ordinary resolution passed by
the shareholders at their 8th
AGM held on September 27, 2012.
There have been no changes in the subscribed and issued capital structure of Reliance Broadcast Network
Limited during the preceding six months.
Reliance Broadcast Network Limited has made no other public or rights issue in the last three years.
2. Reliance Life Insurance Company Limited
Corporate Information
Reliance Life Insurance Company Limited was incorporated in India, under the Companies Act on May 14,
2001. Reliance Life Insurance Company Limited has been granted a license by Insurance Regulatory and
Development Authority on January 03, 2002 for carrying life insurance, health insurance and annuity
business.
Interest of our Promoter
Reliance Capital Limited holds 38.78% interest in Reliance Life Insurance Company Limited.
Financial Information
The brief financial details of Reliance Life Insurance Company Limited derived from its audited standalone
financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 1,16,464.49 1,16,584.49 11,9632.35
Reserves (excluding revaluation
reserves) (86,209.52) (87,285.30) (29,044.23)
Sales & Other Income 6,60,489.62 6,57,114,64 5,49,761.92
Profit After Tax (28,378.84) (12,929.10) 37,257.13
EPS (in `) (2.44) (1.11) 3.16
Diluted EPS (in Rs) (2.44) (1.11) 3.14
Net asset value per share (in `) 2.60 2.51 7.57
3. Reliance Capital Asset Management Limited
Corporate Information
Reliance Capital Asset Management Limited was incorporated in India, under the Companies Act on
February 24, 1995. Reliance Capital Asset Management Limited is engaged in the business of providing
investment management and advisory services to mutual funds. Reliance Capital Asset Management Limited
is the asset management company for Reliance Mutual Fund.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Capital Asset Management Limited.
Financial Information
237
The brief financial details of Reliance Capital Asset Management Limited derived from its audited
standalone financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 1051.00 1,051.00 1,051.00
Reserves (excluding revaluation
reserves)
1,02,810.08 1,10,159.08 119,025.39
Sales & Other Income 65,424.79 69,925.10 64,229.00
Profit After Tax 19,512.55 26,127.34 27,610.90
Basic EPS/ (in `) 185.66 248.59 262.71
Diluted EPS (in `) 185.66 248.04 260.23
Net asset value per share (in `) 969.76 1,033.74 1,116.14
4. Reliance General Insurance Company Limited
Corporate Information
Reliance General Insurance Company Limited was incorporated in India, under the Companies Act on
August 17, 2000. Reliance General Insurance Company Limited is engaged in the business of providing
general insurance services.
Interest of our Promoter
Reliance Capital Limited holds 96.46% interest in Reliance General Insurance Company Limited.
Financial Information
The brief financial details of Reliance General Insurance Company Limited derived from its audited
unconsolidated financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 11,522.40 11,667.30 12,119.33
Reserves (excluding revaluation
reserves) 67,594.68 50,489.61 60,017.64
Sales & Other Income 1,55,220.15 1,46,046.49 2,19,178.68
Profit After Tax (5,042.70) (31,160.17) (34,319.93)
Basic and Diluted EPS (in `) (4.46) (26.80) (29.24)
Net asset value per share (in `) 68.66 59.52 53.27
5. Reliance Securities Limited
Corporate Information
Reliance Securities Limited was incorporated in India, under the Companies Act on June 17, 2005. Reliance
Securities Limited is engaged in the business of securities brokering and is a depository participant of CDSL.
Interest of our Promoter
238
Reliance Capital Limited holds 99.60% interest in Reliance Securities Limited.
Financial Information
The brief financial details of Reliance Securities Limited derived from its audited unconsolidated financial
statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 2,500.00 2,500.00 2,500.00
Reserves (excluding revaluation
reserves) 2,064.61 2,774.82 3,374.76
Sales & Other Income 18,750.54 15,378.58 12,026.37
Profit After Tax 218.05 710.21 599.94
Basic and Diluted EPS (in `)* (6.15) (4.18) (3.41)
Net asset value per share (in `) 18.26 21.10 23.50 * After providing for dividend on cumulative redeemable preference shares
Group Company with negative net worth
The details of the Group Company with negative net worth as at September 30, 2012 are as follows:
1. Indian Commodity Exchange Limited
Corporate Information
Indian Commodity Exchange was incorporated in India, under the Companies Act. Indian Commodity
Exchange Limited is engaged in the business of commodity spot exchange.
Interest of our Promoter
Reliance Capital Limited holds 26.00% interest in Indian Commodity Exchange Limited.
Financial Information
The brief financial details of Indian Commodity Exchange Limited derived from its audited standalone
financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 10,000 10,000 10,000
Reserves & Surplus (excluding
revaluation reserves) (671) (3,793) (6,349)
Sales & Other Income 1,121 1,396 1,066
Profit After Tax (554) (3,122) (2,556)
Basic and Diluted EPS (0.37) (1.56) (1.28)
Net asset value per share 4.66 3.10 1.83
239
2. Reliance Equity Advisors (India) Limited
Corporate Information
Reliance Equity Advisors (India) Limited was incorporated in India, under the Companies Act on May 4,
2005. Reliance Equity Advisors (India) Limited is engaged in the business of providing investment advisory
services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Equity Advisors (India) Limited.
Financial Information The brief financial details of Reliance Equity Advisors (India) Limited derived from its audited standalone
financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 5.00 5.00 5.00
Reserves (excluding revaluation
reserves) (1,752.98) (1,526.55) (1,446.96)
Sales & Other Income 974.81 2,315.81 2,073.45
Profit After Tax (817.41) 226.44 79.58
Basic and Diluted EPS (in `) (1,634.83) 452.88 159.16
Net asset value per share (in `) (3,495.96) (3,043.10) (2,883.92)
3. Reliance Spot Exchange Infrastructure Limited
Corporate Information
Reliance Spot Exchange Infrastructure Limited was incorporated in India, under the Companies Act on
January 12, 2009. Reliance Spot Exchange Infrastructure Limited is engaged in the business of commodity
spot exchange.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Spot Exchange Infrastructure Limited.
Financial Information
The brief financial details of Reliance Spot Exchange Infrastructure Limited derived from its audited
standalone financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 5.00 1,765.00 1,765.00
Reserves (excluding revaluation
reserves) (968.37) (1,524.72) (2,073.35)
Sales & Other Income 2.63 19.91 56.25
Profit After Tax (442.41) (648.48) (550.98)
Basic and Diluted EPS (in `) (884.83) (42.98) (3.12)
240
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Net asset value per share (in `) (1,927.08) 1.36 (1.75)
4. Viscount Management Services Limited
Corporate Information
Viscount Management Services Limited was incorporated in India, under the Companies Act on May 8,
1995. It is engaged in the business of providing consultancy services various fields including, management,
finance and commerce to any person or corporation.
Interest of the Promoter
Reliance Capital Limited holds 17.74% and Reliance Land Private Limited holds 46% interest in Viscount
Management Services Limited.
Financial Information
The brief financial details of Viscount Management Services Limited derived from its audited standalone
financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital 6.00 6.00 23.00
Reserves (excluding revaluation
reserves) 15,507.67 12,904.1 (2,493.96)
Sales & Other Income 0.00 1.15 0.00
Profit After Tax (7,400.29) (7144.15) (7,996.66)
Basic and Diluted EPS (in `) (12,333.81) (11,906.91) (5024.07)
Net asset value per share (in `) 25,856.12 21,516.83 (1,074.33)
5. Indian Agri Services Private Limited
Corporate Information
Indian Agri Services Private Limited was incorporated in India, under the Companies Act on April 29, 2011.
Indian Agri Services Private Limited is engaged in the business and services of handling, delivering
commodities / things / produce from gate level to consumers.
Interest of our Promoter
Reliance Capital Limited holds 100% interest in Indian Agri Services Private Limited.
Financial Information
The brief financial details of Indian Agri Services Private Limited derived from its audited standalone
financial statements for financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
241
Particulars
As at and for the
financial year 2010
As at and for the
financial year 2011
As at and for the
financial year 2012
Equity Capital NA NA 3.00
Reserves (excluding revaluation
reserves)
NA NA (6.60)
Sales & Other Income NA NA 288.08
Profit After Tax NA NA (6.60)
EPS/ Diluted EPS (in `) NA NA (21.99)
Net asset value per share (in `) NA NA (12.00)
Other Group Companies
Details of other Group Companies are as follows:
1. Adhar Project Management & Consultancy Private Limited
Corporate Information
Adhar Project Management & Consultancy Private Limited was incorporated in India, under the Companies
Act on June 11, 2008. Adhar Project Management & Consultancy Private Limited is engaged in the business
of providing management consultancy services.
Interest of our Promoter
Reliance Land Private Limited holds 100.00% interest in Adhar Project Management & Consultancy Private
Limited.
2. Ammolite Holdings Limited
Corporate Information
Ammolite Holdings Limited was incorporated in Jersey, UK, under the relevant applicable laws on August
26, 2005. Ammolite Holdings Limited is engaged in the business of managerial, technical, chartering, and
agency services.
Interest of our Promoter
Reliance Capital Limited and Reliance Land Private Limited each holds 50.00% interest in Ammolite
Holdings Limited.
3. Emerging Money Mall Limited
Corporate Information
Emerging Money Mall Limited was incorporated in India, under the Companies Act, 1956 on March 23,
2009.Emerging Money Mall Limited is engaged in the business of E-commerce.
Interest of our Promoter
Reliance Capital Limited holds 100% interest in Emerging Money Mall Limited.
4. QOPPA Trading Private Limited
Corporate Information
242
QOPPA Trading Private Limited was incorporated in India, under the Companies Act on February 28, 2011.
QOPPA Trading Private Limited is engaged in the business of investment and trading activities.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in QOPPA Trading Private Limited.
5. Quant Broking Private Limited
Corporate Information
Quant Broking Private Limited was incorporated in India, under the Companies Act on December 4, 2007.
Quant Broking Private Limited is engaged in the business of broking.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Broking Private Limited.
6. Quant Capital Advisors Private Limited
Corporate Information
Quant Capital Advisors Private Limited was incorporated in India, under the Companies Act on March 9,
2009. Quant Capital Advisors Private Limited is engaged in the business of providing mutual fund advisory
services.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Capital Advisors Private Limited.
7. Quant Capital Finance and Investments Private Limited
Corporate Information
Quant Capital Finance and Investments Private Limited was incorporated in India, under the Companies Act
on December 31, 1981. Quant Capital Finance and Investments Private Limited is a non banking financial
institution.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Capital Finance and Investments Private Limited.
8. Quant Capital Private Limited
Corporate Information
Quant Capital Private Limited was incorporated in India, under the Companies Act on December 4, 2007.
Quant Capital Private Limited is engaged in the business of providing investment and financial services.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Capital Private Limited.
243
9. Quant Commodities Private Limited
Corporate Information
Quant Commodities Private Limited was incorporated in India, under the Companies Act on March 9, 2009.
Quant Commodities Private Limited is engaged in the business of commodity exchange.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Commodities Private Limited.
10. Quant Commodity Broking Private Limited
Corporate Information
Quant Commodity Broking Private Limited was incorporated in India, under the Companies Act on March 9,
2009. Quant Commodity Broking Private Limited is engaged in the business of commodity broking.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Commodity Broking Private Limited.
11. Quant Investment Services Private Limited
Corporate Information
Quant Investment Services Private Limited was incorporated in India, under the Companies Act on March
18, 2011. Quant Investment Services Private Limited is engaged in the business of providing advisory
services.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Investment Services Private Limited.
12. Quant Securities Private Limited
Corporate Information
Quant Securities Private Limited was incorporated in India, under the Companies Act on December 4, 2007.
Quant Securities Private Limited is engaged in the business of stock broking.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Securities Private Limited.
13. QCAP Trade Private Limited (formerly, Valankulam Investments and Trading Private Limited)
Corporate Information
QCAP Trade Private Limited was incorporated in India, under the Companies Act on March 1, 2011. QCAP
Trade Private Limited is engaged in the business of investment and trading activities.
Interest of our Promoter
244
Reliance Capital Limited holds 74.00% interest in QCAP Trade Private Limited.
14. Quant Alternative Asset Management Private Limited
Corporate Information
Quant Alternative Asset Management Private Limited was incorporated in India, under the Companies Act
on October 12, 2012. Quant Alternative Asset Management Private Limited is engaged in the business of
Investment and Asset Management activities
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Alternative Asset Management Private Limited.
15. Reliance Alternative Investments Services Private Limited
Corporate Information
Reliance Alternative Investments Services Private Limited was incorporated in India, under the Companies
Act on September 26, 2008. Reliance Alternative Investments Services Private Limited is engaged in the
business of providing services of a trustee.
Interest of our Promoter
Reliance Capital Limited holds 100% interest in Reliance Alternative Investments Services Private Limited.
16. Reliance Asset Management (Malaysia) Sdn. Bhd.
Corporate Information
Reliance Asset Management (Malaysia) Sdn. Bhd. was incorporated in Malaysia, under the applicable
Malaysian law on February 20, 2009. Reliance Asset Management (Malaysia) Sdn. Bhd. is engaged in the
business of Islamic fund management.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Malaysia) Sdn. Bhd.
17. Reliance Asset Management (Mauritius) Limited
Corporate Information
Reliance Asset Management (Mauritius) Limited was incorporated in Mauritius, under the applicable
Mauritius law on December 27, 2004. Reliance Asset Management (Mauritius) Limited is engaged in the
business of providing investment management and advisory services to collective investment schemes.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Mauritius) Limited.
18. Reliance Asset Management (Singapore) Pte Limited
Corporate Information
245
Reliance Asset Management (Singapore) Pte Limited was incorporated in Singapore, under the applicable
Singapore law on August 22, 2005. Reliance Asset Management (Singapore) Pte Limited is engaged in the
business of providing fund management and advisory services.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Singapore) Pte Limited.
19. Reliance Asset Reconstruction Company Limited
Corporate Information
Reliance Asset Reconstruction Company Limited was incorporated in India, under the Companies Act on
April 17, 2006. Reliance Asset Reconstruction Company Limited is engaged in the business of asset
reconstruction and securitization.
Interest of our Promoter
Reliance Capital Limited holds 49% interest in Reliance Asset Reconstruction Company Limited.
20. Reliance Capital (Singapore) Pte. Limited
Corporate Information
Reliance Capital (Singapore) Pte. Limited was incorporated in Singapore, under the applicable Singapore law
on July 8, 2008. Reliance Capital (Singapore) Pte. Limited is engaged in the business of providing fund
management services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Capital (Singapore) Pte. Limited.
21. Reliance Capital Asset Management (UK) Plc.
Corporate Information
Reliance Capital Asset Management (UK) Plc. was incorporated in UK, under the applicable UK law on
May 23, 2007. Reliance Capital Asset Management (UK) Plc. is engaged in the business of providing
financial advisory services.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Capital Asset Management (UK) Plc.
22. Reliance Capital Partners
Corporate Information
Reliance Capital Partners is a partnership firm constituted in India, under the Indian Partnership Act, 1932 on
April 19, 2006. Reliance Capital Partners is engaged in the business of trading in various commodities and
articles other than securities.
Interest of our Promoter
246
Reliance Capital Partners is a partnership firm. Reliance Capital Limited and Reliance Land Private Limited
are its partners.
23. Reliance Capital Pension Fund Limited
Corporate Information
Reliance Capital Pension Fund Limited was incorporated in India, under the Companies Act on March 31,
2009. Reliance Capital Pension Fund Limited is engaged in the business of managing pension funds and
undertaking related activities.
Interest of our Promoter
Reliance Capital Limited holds 70.45% interest in Reliance Capital Pension Fund Limited.
24. Reliance Capital Trustee Co. Limited
Corporate Information
Reliance Capital Trustee Co. Limited was incorporated in India, under the Companies Act on March 1, 1995.
Reliance Capital Trustee Co. Limited is engaged in the business of providing trusteeship services and act as
administrator of mutual funds. Reliance Capital Trustee Co. Limited is the trustee for Reliance Mutual Fund.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Capital Trustee Co. Limited.
25. Reliance Commodities Limited
Corporate Information
Reliance Commodities Limited was incorporated in India, under the Companies Act on July 8, 2005.
Reliance Commodities Limited is engaged in the business of Commodities Broking.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Commodities Limited.
26. Reliance Composite Insurance Broking Limited
Corporate Information
Reliance Composite Insurance Broking Limited was incorporated in India, under the Companies Act on
October 24, 1994. Reliance Composite Insurance Broking Limited is engaged in the business of insurance
broking.
Interest of our Promoter
Reliance Capital Limited holds 51.79% in Reliance Composite Insurance Broking Limited.
27. Reliance Consultants (Mauritius) Ltd.
Corporate Information
247
Reliance Consultants (Mauritius) Ltd. was incorporated in Mauritius, under the applicable Mauritius law on
March 10, 2008. Reliance Consultants (Mauritius) Ltd. is engaged in the business of providing investment
advisory services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Consultants (Mauritius) Ltd.
28. Reliance Equities International Private Limited
Corporate Information
Reliance Equities International Private Limited was incorporated in India, under the Companies Act on
February 21, 2000. Reliance Equities International Private Limited is engaged in the business of institutional
broking services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Equities International Private Limited.
29. Reliance Exchangenext Limited
Corporate Information
Reliance Exchangenext Limited was incorporated in India, under the Companies Act on July 7, 2000.
Reliance Exchangenext Limited is engaged in the business of forming and promoting stock exchanges.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Exchangenext Limited.
30. Reliance Financial Limited
Corporate Information
Reliance Financial Limited was incorporated in India, under the Companies Act on August 26, 2005.
Reliance Financial Limited is registered with RBI as a Non Banking Financial Company. Reliance Financial
Limited is engaged in the business of providing financial services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Financial Limited.
31. Reliance Gilts Limited
Corporate Information
Reliance Gilts Limited was incorporated in India, under the Companies Act on August 17, 2000. Reliance
Gilts Limited is engaged in the business of dealing in government securities.
Interest of our Promoter
248
Reliance Capital Limited holds 100.00% interest in Reliance Gilts Limited.
32. Reliance Home Finance Limited
Corporate Information
Reliance Home Finance Limited was incorporated in India, under the Companies Act on June 5, 2008.
Reliance Home Finance Limited is engaged in the business of providing home finance and other allied
services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Home Finance Limited.
33. Reliance Investment Banking Services Limited
Corporate Information
Reliance Investment Banking Services Limited was incorporated in India, under the Companies Act on May
22, 2008. Reliance Investment Banking Services Limited is engaged in the business of providing investment
/ merchant banking services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Investment Banking Services Limited.
34. Reliance Money Express Limited
Corporate Information
Reliance Money Express Limited was incorporated in India, under the Companies Act on November 28,
2002. Reliance Money Express Limited is registered with RBI for providing services as a full –fledged
money changer (FFMC) and money transfer services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Money Express Limited.
35. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private
Limited)
Corporate Information
Reliance Money Precious Metals Private Limited was incorporated in India, under the Companies Act on
October 5, 2006.
Reliance Money Precious Metals Private Limited is engaged in the business of offering Gold Accumulation
Plans to retail investors.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Money Precious Metals Private Limited.
36. Reliance Share & Stock Brokers Private Limited
249
Corporate Information
Reliance Share & Stock Brokers Private Limited was incorporated in India, under the Companies Act on
November 26, 1993. Reliance Share & Stock Brokers Private Limited is engaged in the business of share and
stock broking services.
Interest of our Promoter
Reliance Capital Limited and Reliance Land Private Limited each hold 50.00% interest in Reliance Share &
Stock Brokers Private Limited.
37. Reliance Venture Asset Management Private Limited
Corporate Information
Reliance Venture Asset Management Private Limited was incorporated in India, under the Companies Act on
October 6, 2006. Reliance Venture Asset Management Private Limited is engaged in the business of
providing venture capital services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Venture Asset Management Private Limited.
38. Reliance Wealth Management Limited
Corporate Information
Reliance Wealth Management Limited was incorporated in India, under the Companies Act on January 1,
2009. Reliance Wealth Management Limited is engaged in the business of providing portfolio / wealth
management services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Wealth Management Limited.
Common Pursuits amongst our Group Companies with our Company
There are no common pursuits amongst any of our Group Companies and our Company.
Related Business Transactions within our Group Companies and Significance on the Financial
Performance of our Company
For details, please see the chapter entitled “Financial Statements” at page F1.
Sale/ Purchase between Group Companies
Our Company does not have any sales/purchase arising out of any transaction with any group company
exceeding aggregate 10% of total sales or purchase of our Company during the financial years 2012, 2011,
2010, 2009 and 2008.
COMPANIES WITH WHICH OUR PROMOTERS HAVE DISASSOCIATED IN THE LAST
THREE YEARS
250
Except as disclosed below, our Promoters have not disassociated from any company during the preceding
three years from the date of this Draft Letter of Offer:
Reliance Capital Limited has disassociated from Medybiz Private Limited, Net Logistics Private Limited,
Reliance Capital Services Private Limited And Reliance Infrastructure Finance Private Limited as a result of
sale of shares held by it in these companies. Reliance Commercial Finance Private Limited and Viscount
Management Services (Alpha) Limited have been amalgamated with Reliance Capital Limited. Further,
Reliance Capital Limited has dissolved its partnership firm Reliance Capital Infrastructure Partners.
251
DIVIDEND POLICY
The declaration and payment of dividends will be recommended by our Board of Directors and approved by
the shareholders of our Company, at their discretion, subject to the provisions of the Articles of Association
and the Companies Act. The dividend, if any, will depend on a number of factors, including but not limited
to the future expansion plans and capital requirements, profit earned during the financial year, liquidity and
applicable taxes including dividend distribution tax payable by our Company.
Our company has not paid any dividend on the Equity Shares for financial years 2010, 2011 and 2012.
F-1
SECTION V: FINANCIAL STATEMENTS
Sr. No. Particulars Pg No.
1. Audited restated consolidated financial statements as of and for the
eighteen months period ended September 30, 2012, as of and for the
year ended March 31, 2011, the year ended March 31, 2010, the year
ended March 31, 2009, nine months ended March 31, 2008
F2 – F122
2. Audited restated standalone financial statements as of and for the
eighteen months period ended September 30, 2012, as of and for the
year ended March 31, 2011, the year ended March 31, 2010, the year
ended March 31, 2009, nine months ended March 31, 2008
F123 – F233
3. Pro Forma Financials F234 - F237
F-2
The Board of Directors
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
MUMBAI 400 065
March 11, 2013
Dear Sirs
1. We have examined the attached restated summary consolidated financial information of Reliance
MediaWorks Limited („RMWL‟ or „the Company‟ or „the Parent Company‟) and its subsidiaries, joint
ventures and associate / s (together referred to as „the Group‟), as approved by the Board of Directors
of the Company, prepared in terms of the requirements of Paragraph B, Part II of Schedule II to the
Companies Act, 1956 ('the Act'), the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations 2009, as amended to date, to the extent applicable („SEBI
Regulations‟), the Guidance note on „Reports in Company Prospectus (Revised)‟ issued by the Institute
of Chartered Accountants of India („ICAI‟), to the extent applicable („Guidance Note‟), and in terms of
our engagement agreed upon with you in accordance with our engagement letter dated February 20,
2013 in connection with the proposed Issue of Equity Shares of the Company on a rights basis.
2. We have examined the attached Summary Statement of Assets and Liabilities, as restated, of the Group
as at September 30, 2012, March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008, the
attached Summary Statement of Profit and Loss, as restated, of the Group for the eighteen months
period ended September 30, 2012, year ended March 31, 2011, year ended March 31, 2010, year ended
March 31, 2009 and nine months ended March 31, 2008 and the attached Summary Statement of Cash
Flow, as restated, of the Group for the eighteen months period ended September 30, 2012, year ended
March 31, 2011, year ended March 31, 2010, year ended March 31, 2009 and nine months ended
March 31, 2008, as set out in Annexure I, Annexure II and Annexure III respectively, together referred
to hereinafter as the „Restated Summary Statements of the Group‟. These Restated Summary
Statements of the Group have been prepared by the management of the Company from the audited
consolidated financial statements for the eighteen months period ended September 30, 2012 for the
year ended March 31, 2011, year ended March 31, 2010, year ended March 31, 2009 and nine months
ended March 31, 2008, being the last five financial years / periods for which the consolidated accounts
of the Group have been made up, and have been approved by the Board of Directors of the Company
for the respective years and approved by the members of the Company. The consolidated financial
statements of the Company as at and for the year ended March 31, 2009 and nine months ended March
31, 2008have been audited by one of the joint auditors, B S R & Co., Chartered Accountants. The
consolidated financial statements for the eighteen months ended September 30, 2012 and the financial
statements as at and for the year ended March 31, 2011 and year ended March 31, 2010 have been
audited by us.
a. In the consolidated financial statements for the nine months ended March 31, 2008, the joint
auditors, B S R & Co., Chartered Accountants, have relied on reports of other auditors for
subsidiaries, associate and certain joint ventures not audited by them, whose financial statements
reflect the Group‟s share of total assets of ` 4,200.20 lakhs as at March 31, 2008 and the Group‟s
share of total revenues of ` 3,490.00 lakhs and net cash inflows of ` 3,256.30 lakhs for the nine
months ended March 31, 2008.
b. In the consolidated financial statements for the year ended March 31, 2009, the joint auditors,
B S R & Co., Chartered Accountants, have relied on reports of other auditors for subsidiaries,
associate and certain joint ventures not audited by them, whose financial statements reflect the
Group‟s share of total assets of ` 40,048.70 lakhs as at March 31, 2009 and the Group‟s share of
total revenues of ` 20,003.80 lakhs and net cash inflows of ` 1,323.60 lakhs for the year ended
March 31, 2009.
c. In the consolidated financial statements for the year ended March 31, 2010:
F-3
i. the financial statements of Swanston Multiplex Cinemas Private Limited, a joint venture has
been audited by one of the joint auditors, B S R & Co., Chartered Accountants, whose
financial statements reflect Group‟s share of total assets of ` 937.60 lakhs as at March
31, 2010, Group‟s share of total revenues of ` 542.10 lakhs and Group‟s share of net cash
inflows aggregating ` 3.20 lakhs for the year ended on that date;
ii. the financial statements of Adlabs Distributors and Exhibitors Limited, a subsidiary has been
audited by one of the joint auditors, Chaturvedi & Shah Chartered Accountants, whose
financial statements reflect Group‟s share of total assets of ` 691.40 lakhs as at March
31, 2010, Group‟s share of total revenues of ` 173.50 lakhs and Group‟s share of net cash
inflows aggregating ` 43.80 lakhs for the year ended on that date;
iii. we have relied on reports of other auditors for certain subsidiaries, associate and certain joint
ventures not audited by us, whose financial statements reflect the Group‟s share of total assets
of ` 63,844.80 lakhs as at March 31, 2010 and the Group‟s share of total revenues of `
25,476.10 lakhs and Group‟s share of net cash outflows aggregating ` 35.60 lakhs for the year
ended on that date.
d. In the consolidated financial statements for the year ended March 31, 2011:
i. the financial statements of Swanston Multiplex Cinemas Private Limited a joint venture has
been audited by one of the joint auditors, B S R & Co., Chartered Accountants, whose
financial statements reflect Group‟s share of total assets of ` 838.50 lakhs as at March
31, 2011, Group‟s share of total revenues of ` 589.50 lakhs and net cash outflows aggregating
` 46.70 lakhs for the year ended on that date;
ii. we have relied on reports of other auditors for certain subsidiaries and certain joint ventures
not audited by us, whose financial statements reflect the Group‟s share of total assets of `
70,293.40 lakhs as at March 31, 2011 and the Group‟s share of total revenues of ` 32,236.50
lakhs and Group‟s share of net cash outflows aggregating ` 796.19 lakhs for the year ended on
that date.
e. In the consolidated financial statements for the eighteen months ended September 30, 2012:
i. we have relied on reports of other auditors for certain subsidiaries and certain joint ventures
not audited by us, whose financial statements reflect the Group‟s share of total assets of `
58,143.20 lakhs as at September 30, 2012 and the Group‟s share of total revenues of `
45,324.60 lakhs and Group‟s share of net cash inflows aggregating ` 1,494.80 lakhs for the
eighteen months ended on that date.
3. Without qualifying our report, we draw attention to the following:
a. As set out in paragraph (a) (i) of Note D of Annexure IV to this report, the Group‟s net worth is
fully eroded and has a negative net worth of ` 58,149.80 Lakh (as restated), the Group has
incurred a loss of ` 91,016.62 lakh (as restated) for the period April 1, 2011 to September
30, 2012, indicating the existence of uncertainty that may cast doubt about the Group‟s ability to
continue as a going concern. Considering the matters set out in the said note, this Restated
Summary Statement, of the Group is prepared on a going concern basis.
b. As set out in paragraph (d)(i) of Note D of Annexure IV, during the period ended March
31, 2008, the Hon‟ble High Court of Judicature at Bombay vide its order dated March 7, 2008
sanctioned the Modified Composite Scheme of Amalgamation and Arrangement („Modified
Scheme‟) for modification of the Composite Scheme. The Modified Scheme was filed with the
ROC on March 31, 2008. The Modified Scheme inter-alia provides that the net results of the
transactions related to the radio business of the Company for the period from March 31, 2006 to
the Effective Date (i.e. the date of filing the Modified Scheme with the ROC, March 31, 2008)
be adjusted in the General reserve account of the Company. The Composite Scheme was given
effect to in accordance with the accounting treatment prescribed by the said Scheme in the
F-4
consolidated financial statements for the fifteen months ended June 30, 2007 and, only the
modifications to the original scheme were have been given effect to in the consolidated financial
statements for the nine months ended March 31, 2008.
c. As set out in paragraph (c)(ii) of Note D and point 2 of paragraph IV of Note E of Annexure IV,
during the year ended March 31, 2009, the Hon‟ble High Court of Judicature at Mumbai vide its
order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company with its
wholly owned subsidiaries Adlabs Multiplex and Theatres Limited, Adlabs Multiplex Limited,
Rave Entertainment Private Limited and Mahimna Entertainment Private Limited
(„Amalgamation Scheme‟), under sections 391 to 394 of the Act. Pursuant to the said
Amalgamation Scheme, the Company has recorded an increase in value of its assets aggregating
` 17,890.10 lakhs by crediting the Capital reserve. Further, the Company has recorded an
adjustment for diminution in value of its assets (production and distribution rights, fixed assets,
investments, debtors and loans and advances) aggregating ` 15,669.60 lakhs by debiting the
same to Capital reserve instead of the profit and loss account, had the Company debited the
profit and loss account, the loss before tax for the year would be higher by the said amount.
4. Effective April 1, 2011, revised Schedule VI notified vide Notification No. S.O. 447(E), dated
February 28, 2011 (as amended by Notification No. 2/6/2008-CL-V, dated 30-3-2011) and General
Circular No. 62/2011 F No. 17/244/2011-CL-V, dated September 5, 2011 under the Act has become
applicable to the Group for preparation and presentation of these Summary financial statements, as
restated of the Group. Accordingly, the Group has prepared these Restated Summary Statements as per
revised Schedule VI. The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of annual financial statements, however it introduces
additional new disclosures, including compulsory classification of all assets and liabilities into current
and non-current.
Further, we draw attention to the fact that for the purposes of these Restated Summary Statements, due
to practical difficulties, restatement/ reclassification of the summary financial information as per
revised Schedule VI, pertaining to certain subsidiaries, associate/s and certain joint ventures, the said
restatement/ reclassification for the year / period ended March 31, 2010, March 31, 2009 and nine
months ended March 31, 2008 has not been audited by the respective auditor. Such financial
information, as approved by the Board of Directors of the Company and certified by a Proprietor / firm
of chartered accountant have been furnished to us by the management of the Company and our report
in so far as it relates to the amounts included in respect of such subsidiaries, associate/s and joint
venture is based solely on such certified summary financial information.
5. In accordance with the requirements of Paragraph B, Part II of Schedule II of the Act, the SEBI
Regulations, the Guidance Note and in accordance with the terms of our engagement agreed with you,
and read with paragraphs 2 and 4 above and with regards to adjustments for matters of emphasis in the
Auditors‟ report as stated in paragraph 3 above, we confirm/ further report that the Restated
Consolidated Summary Statements examined by us and as set out in Annexure I, Annexure II and
Annexure III to this report are prepared after making adjustments and regrouping as in our opinion
were appropriate and as are more fully described in the significant accounting policies and notes to the
Restated Summary Statements of the Group enclosed as Annexure IV to this report.
6. Based on the above, read with the matters stated in paragraph 2 and 4 above and with regards to
adjustments for matters of emphasis in the Auditors‟ report as stated in paragraph 3 above, we are of
the opinion that the Restated Summary Statements of the Group have been made after incorporating:
i. Adjustments for the changes in accounting policies adopted by the Company retrospectively in
respective financial years / periods to reflect the same accounting treatment as per changed
accounting policy for all the reporting periods;
ii. Adjustments for material amounts in the respective financial years/ periods to which they relate;
and
iii. There are no extraordinary items that need to be disclosed separately in the Restated Summary
Statements of the Group.
F-5
iv. Adjustments for qualifications, as applicable in the Auditors‟ reports in the respective years/
periods to which they relate.
7. We have also examined the following other restated financial information set out in the Annexures
prepared by the management and approved by the Board of Directors, relating to the Restated
Summary Statements of the Group and annexed to this report.
a) Statement of share capital of the Group, enclosed as Annexure V
b) Summary statement of reserves and surplus of the Group, enclosed as Annexure VI
c) Statement of non-current investment, deferred tax assets, long-term loans and advances and other
non-current assets, of the Group, enclosed as Annexure VII
d) Statement of current assets of the Group, enclosed as Annexure VIII
e) Statement of non-current liabilities of the Group, enclosed as Annexure IX
f) Statement of current liabilities of the Group, enclosed as Annexure X
g) Statement of revenue of the Group, enclosed as Annexure XI
h) Statement of other income of the Group, enclosed as Annexure XII
i) Statement of contingent liabilities and commitments of the Group, enclosed as Annexure XIII
j) Statement of accounting ratios of the Group, enclosed as Annexure XIV
k) Statement of principal terms and conditions of long-term borrowings and short-term borrowings of
the Group, enclosed as Annexure XV
l) Statement of capitalization of the Group, as at September 30, 2012, enclosed as Annexure XVI
m) Statement of dividend paid/ proposed of the Group, enclosed as Annexure XVII
n) Statement of related party disclosures of the Group, enclosed as Annexure XVIII
o) Statement of Segment Information of the Group, enclosed in Annexure XIX.
8. In our opinion, the Restated Summary Statements, as restated of the Group contained in Annexure I,
Annexure II and Annexure III to this report, read with the significant accounting policies and notes
disclosed in Annexure IV and other financial information contained in Annexure V to Annexure XIX
of this report and read with paragraphs 2, 3 and 4 above and note 3 disclosed in Annexure VII and
Annexure VIII respectively, have been prepared in accordance with Paragraph B, Part II of Schedule II
of the Act and the SEBI Regulations.
9. The report should not in any way be construed as a reissuance or redating of any of the previous audit
reports issued by us or by the other firm of Chartered Accountants, nor should this report be construed
as a new opinion on any consolidated financial statements referred to herein.
10. We have no responsibility to update our report for events and circumstances occurring after the date of
the report.
11. This report is intended solely for use of the management and for inclusion in the Offer Document in
connection with the proposed issue of equity shares of the Company on a rights basis, and is not to be
used, referred to or distributed for any other purpose without our prior written consent.
For B S R & Co.
Chartered Accountants
Firm‟s Registration No: 101248W
For Chaturvedi & Shah
Chartered Accountants
Firm‟s Registration No: 101720W
Bhavesh Dhupelia
Partner
Membership No: 042070
Mumbai
March 11, 2013
Parag D. Mehta
Partner
Membership No: 113904
Mumbai
March 11, 2013
F-6
F-7
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A Non-current assets
I Fixed assets
(i) Tangible assets 89,148.54 111,782.74 104,933.32 80,215.84 40,666.60
(ii) Intangible assets 8,895.80 8,804.20 6,034.60 3,249.60 18,251.60
(iii) Capital work-in-
progress 12,010.90 15,029.90 24,538.92 21,203.60 21,331.01
(iv) Intangible assets
under development 285.90 - 132.51 - -
II Goodwill on consolidation 5,145.32 8,819.42 8,728.62 4,202.56 2,746.76
III Non-current investments 553.34 1,092.99 1,272.41 1,161.72 6,991.37
IV Deferred tax assets (net) 14.31 2.60 2.20 18.70 64.40
V Long-term loans and
advances 23,642.50 29,324.98 27,141.64 24,792.10 29,293.35
VI Other non-current assets 62.00 389.30 277.42 59.41 43.75
139,758.61 175,246.13 173,061.64 134,903.53 119,388.84
B Current assets
I Current investments - 10.44 7,902.30 - 13,556.71
II Inventories 1,417.70 1,325.30 907.20 690.50 761.30
III
Trade receivables
18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
IV Cash and bank balances 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49
V Short-term loans and
advances 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
VI Other current assets 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96
46,293.94 53,482.14 79,667.62 68,885.16 67,888.57
Liabilities
C Non-current liabilities
I Long-term borrowings 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90
II Deferred tax liabilities
(net) - 516.39 63.39 66.59 192.03
III Other long-term liabilities 3,639.00 2,909.05 1,468.90 871.85 342.98
IV Long-term provisions 621.10 774.71 383.20 3,434.40 3,038.99
79,928.47 48,630.26 42,320.49 61,733.30 56,673.90
D Minority interest 1,074.08 1,347.88 1,736.58 3,006.58 1,621.78
E Current liabilities
F-8
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
I Short-term borrowings 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22
II Trade payables 18,967.70 12,935.97 11,088.28 8,287.62 9,003.83
III Other current liabilities 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62
IV Short-term provisions 200.90 215.99 165.91 230.40 1,826.01
163,199.80 176,089.69 172,880.96 89,832.56 61,198.68
F Net Worth (A+B-C-D-E) (58,149.80) 2,660.44 35,791.23 49,216.25 67,783.05
G Represented by
i) Share capital 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and surplus (net) (60,603.61) 354.13 33,484.92 46,909.94 65,476.74
H Net worth ( i+ ii ) (58,149.80) 2,660.44 35,791.23 49,216.25 67,783.05
The above statement should be read together with significant accounting policies and notes to
summary statement of assets and liabilities, as restated, of the Group (Annexure IV)
F-9
Annexure II
Reliance MediaWorks Limited
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009
Period
2008
Revenue from operations 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94
Other income 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80
Total revenue 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74
Direct operational expenses 49,304.20 31,059.80 28,102.00 23,868.30 9,792.00
Employee benefits expense 31,712.30 20,979.80 13,179.30 10,147.60 2,605.10
Finance costs (including loss on
derivative contracts) (net) 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Depreciation, amortisation and
impairment expense 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Other expenses 65,209.31 34,672.96 25,317.05 20,056.90 7,914.65
Total expenses 207,312.71 117,453.26 88,044.99 80,062.41 33,370.61
(Loss) / profit before exceptional
items, tax and minority interest (81,825.81) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Exceptional items (Refer note 10 of
A of E of Annexure IV) (8,181.50) - - - -
(Loss) / profit before tax and
minority interest (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
less - Provision for taxes
- Current tax 769.50 133.94 39.77 441.10 228.29
- Deferred tax (credit) / charge (492.59) 452.69 13.25 (69.44) 551.72
- Fringe benefit tax - - - 171.70 78.00
Net (loss) / profit after tax before
minority interest (90,284.22) (33,013.69) (13,334.11) (7,485.53) 2,068.12
Less: (Loss) / profit transferred to
Minority interest 732.40 (196.70) (530.87) (322.12) 53.80
Net (loss) / profit after tax before
adjustment pursuant to Schemes (91,016.62) (32,816.99) (12,803.24) (7,163.41) 2,014.32
Add: Adjustment pursuant to
Modified Composite Scheme of
Amalgamation and Arrangement - - - - 84.20
Less: Adjustment pursuant to
Scheme of Amalgamation of Katch
22 - - - - (100.00)
Less: Adjustment pursuant to
Scheme of Arrangement for
demerger of Radio business/
Scheme of Amalgamation - - - (649.30) -
F-10
Annexure II
Reliance MediaWorks Limited
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009
Period
2008
Net (loss) / profit after tax (Balance
carried to Annexure VI) (91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52
The above statement should be read together with significant accounting policies and notes to summary
statement of profit and loss, as restated, of the Group (Annexure IV)
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F-11
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
A
Cash flow from operating
activities
Net (loss) / profit before
tax, as restated (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Adjustment for
Depreciation, amortisation
and impairment expense 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Bad debts / Advances
written off 1,010.40 201.20 152.10 348.40 391.00
Sundry balances written-off 981.50 - - - -
Provisions written back
- (241.70) - -
Capital work in progress
written off 4,424.60 - - - -
Provision for doubtful debts
and advances 4,767.92 1,666.30 121.90 - 3.20
Dividend income (0.40) - - (132.60) (127.40)
Interest income (1,255.70) (868.40) (538.60) (967.10) (967.70)
Profit on derivative contract
- - - (977.40)
Loss / (profit) on sale /
discarding of fixed assets
(net) 669.80 (2,694.80) 70.60 6.80 57.20
Loss on disposal of
subsidiaries 2,722.92 - - - -
Gain on sale of current
investments (39.50) (423.60) (274.40) (269.20) (32.40)
Gain on sale of investments - - - (1,700.00) (2,660.30)
Unrealised foreign
exchange (gain) / loss (2,304.85) (129.80) (474.39) (1,136.60) 16.70
Finance costs (including
loss on derivative contracts)
(net) 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Operating profit before
working capital changes
and before net results of
Radio Business (17,943.72) (3,935.46) 6,981.06 15,197.14 11,687.89
Adjustment for cash loss
pertaining to transaction
relating to Radio business
till March 31, 2008,
pursuant to the Modified
Composite Scheme of
Amalgamation and
Arrangement - - - - (8,377.00)
(17,943.72) (3,935.46) 6,981.06 15,197.14 3,310.89
Operating profit before
working capital changes
Adjustment for :
(Increase) / decrease in
trade receivables (2,083.40) (393.30) (2,513.90) (17,371.80) (7,658.94)
F-12
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Decrease / (increase) in
loans and advances and
other assets 2,806.20 (5,004.24) (1,670.40) 7,719.20 (1,370.40)
(Increase) / Decrease in
Inventories (178.50) (417.00) (231.50) 80.10 (551.40)
Increase / (decrease) in
trade and other payable 7,912.90 3,345.12 4,196.26 (2,084.43) 10,404.08
Adjustment for Katch 22
merger due to Scheme of
Amalgamation (Refer note
3 of V of E of Annexure
IV) - - - - 23.30
Cash (used in) / generated
from operating activities (9,486.52) (6,404.88) 6,761.52 3,540.21 4,157.53
Taxes paid (net of refunds) 1,198.30 1,188.26 (1,467.09) (1,974.50) (1,628.70)
Net cash (used in) /
generated from operating
activities (A) (8,288.22) (5,216.62) 5,294.43 1,565.71 2,528.83
B
Cash flow from investing
activities
Purchase of fixed assets (8,721.73) (22,335.80) (40,917.60) (35,911.00) (49,772.50)
Proceeds from sale of fixed
assets 1,914.10 13,999.70 23.10 1,097.50 14.10
Purchase of investment-
long term- in shares of
subsidiaries companies/
joint venture/ associates - (90.80) (3,001.00) (7,861.20) (2,653.60)
Profit from / investment in
mutual funds (net) 39.50 423.60 274.40 269.20 32.40
Red-emption of /
investment in mutual funds - 7,983.98 (7,982.03) 13,556.69 (13,623.83)
Purchase of investment-
long term- other - - (9.90) (4.30) (0.30)
Proceeds on sale of non-
current investments / rights
therein 9,092.50 23.10 4,066.80 3,127.30 -
(Investment in) /
withdrawals‟ from
Partnership firm 33.26 (15.80) 371.80 278.30 -
Dividend income
- - 132.60 127.40
Dividend income 0.40
Advance towards share
application (6,811.20)
Interest income 1,368.30 784.50 647.30 1,626.10 288.20
Cash (used)/ generated in
investing activities (3,084.87) 772.48 (46,527.13) (23,688.81) (65,588.13)
Taxed paid (net of refunds) (76.80) (25.80) (35.60) (103.10) (194.40)
Net Cash (used)/
generated in investing (3,161.67) 746.68 (46,562.73) (23,791.91) (65,782.53)
F-13
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
activities (B)
C
Cash flow from financing
activities
Proceeds from fresh issue of
share capital (including
share premium) /
preference shares 29,500.00 - - - -
Payment to Minority (994.10) (228.60) (598.60) (212.90) -
Dividend tax paid on
distribution by Subsidiaries
and joint ventures
(9.10) - (12.80) -
Introduction of capital by
minority partners in a
Subsidiary
- 62.99 - -
Profit/ (loss) on option
contract - - - - 977.40
Proceeds from long-term
borrowings 68,308.50 39,775.90 5,489.00 7,826.10 40,000.00
Repayment of Foreign
currency convertible bonds
(15,814.50) - - -
(Repayment) / proceeds
from short term borrowings
(net) 3,029.50 (1,003.80) 52,962.60 31,271.20 28,812.30
Repayment of long term
borrowings (62,160.50) (17,083.30) - - -
Interest recoverable from
Reliance Broadcast
Network Limited
(1,448.60) (2,507.90) (2,584.90) -
Recovered from Reliance
Broadcast Network
Limited pursuant to
demerger of Radio business 9,961.40 20,000.00 - - -
Dividend (including
dividend tax) paid (7.90) - - (1,349.20) (1,164.10)
Finance costs (including
loss on derivative contracts)
(net) (35,314.00) (18,773.50) (13,414.80) (11,287.10) (4,949.20)
Net cash generated from /
(used in) financing
activities ( C ) 12,322.90 5,414.50 41,993.29 23,650.40 63,676.40
Net increase / (decrease)
in cash and cash
equivalent (A+B+C) 873.01 944.56 724.99 1,424.20 422.70
Cash and cash equivalents
as at beginning of the
period 5,521.75 4,557.09 3,659.50 5,830.40 5,101.00
Cash and cash equivalents
taken over on acquisition of (794.96) - 292.10 611.90 -
F-14
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
subsidiaries
Exchange gain / loss on
translation 99.20 20.10 (119.50) - -
Cash and cash equivalents
disposed on sale of subs/
JV's - - - - -
Adjustment from
Composite Scheme of
Amalgamation and
Arrangement / Modified
Composite Scheme of
Amalgamation and
Arrangement / Scheme of
Arrangement / Scheme of
Amalgamation - - - (4,207.00) 306.70
Cash and cash equivalents
as at end of the period
(refer note (I) and (II) D
of Annexure VIII) 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40
873.01 944.56 724.99 1,424.20 422.70
The above statement should be read together with significant accounting policies and notes to summary
statement of cash flows, as restated, of the Group (Annexure IV)
Note:
3. The above cash flow statement has been prepared under the “Indirect” Method as set out in Accounting
Standard 3 – „Cash Flow Statements‟.
4. During Period 2012, the Company has apportioned the loans received on a short term basis into
preference shares amounting to ` 29,500 lakhs
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F-15
Annexure IV
Reliance MediaWorks Limited
Significant accounting policies and notes to the restated summary statements of the Group
The figures for Period 2012 represent eighteen months ended September 30, 2012, Period 2011 represent the year
ended March 31, 2011, Period 2010 represents the year ended March 31, 2010, Period 2009 represents the year ended
March 31, 2009 and Period 2008 represents the nine months ended March 31, 2008. Summary statements are not
strictly comparable on account of accounting pursuant to Court approved Schemes in Period 2008 and Period 2009.
Also, the summary statements are not comparable on account of varying accounting periods forming part of them.
The restated summary statements of the Group have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (“the Act”) read with the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on
August 26, 2009, as amended, to the extent applicable.
A. Summary of significant accounting policies
1. Basis of preparation
These summary statements of the Group relate to Reliance MediaWorks Limited („the Company or Parent
Company‟), its subsidiary companies, associates and joint ventures. The Company along with its
subsidiaries, associates and joint ventures constitute „the Group‟.
The summary statements of the subsidiaries, joint venture and associates companies used in the
consolidation are for the same reporting period as the Company. These financial statements are audited by
the auditors of the respective entities.
These summary statements of the Group are prepared and presented under the historical cost convention on
the accrual basis of accounting except for revaluation of certain fixed assets and in accordance with the
Accounting Standards („AS‟) notified in the Companies (Accounting Standards) Rules, 2006 and the
relevant provisions of the Companies Act, 1956 („the Act‟), to the extent applicable. The summary
statements are presented in Indian Rupees in lakhs except per share data and where mentioned otherwise.
Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011 (as
amended by notification no. F. No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no.
62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised Schedule VI
notified under the Act has become applicable to the Company for the purpose of preparation and
presentation of its summary statements. The adoption of revised Schedule VI does not impact the
recognition and measurement principles followed for preparation of summary statements. All assets and
liabilities have been classified as current or non-current as per the Company‟s normal operating cycle and
other criteria set out in the revised Schedule VI.
Due to practical difficulties, restatement / reclassification of the summary financial information as per
revised Schedule VI, pertaining to certain subsidiaries, associate and joint ventures, the said restatement /
reclassification for the Period 2012, 2011, 2010, 2009 and 2008 has not been audited by the respective
auditor. Such financial information, as approved by the Board of Directors of the Company and certified by
a firm of Chartered Accountant / Chartered Accountant have been furnished to us by the management of the
Company and our report in so far as it relates to the amounts included in respect of such subsidiaries,
associate and joint venture is based solely on such certified summary financial information.
The restated summary statements of Group have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of
F-16
India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by
SEBI on August 26, 2009, as amended, to the extent applicable.
2. Principles of Consolidation
The Summary statements of the Group are prepared in accordance with AS 21 – „Consolidated Financial
Statements‟, AS 23 - „Accounting for Investments in Associates in Consolidated Financial Statements‟ and
AS 27 – „Financial Reporting of Interest in Joint ventures‟. Summary statements of the Group are prepared
using uniform accounting policies for transactions and other events in similar circumstances except where it
is not practicable to do so. The Summary statements of the Group are presented, to the extent possible, in
the same format as that adopted by the Parent Company for its independent Summary Statements. The
Summary statements of the Group have been consolidated on the following basis:
Subsidiaries
The excess of cost to the Group of its investment in subsidiaries over its portion of equity in the subsidiaries
at the respective dates on which investments in such subsidiaries was made is recognised in the financial
statements as goodwill and any excess of assets over the investment of the Group in a subsidiary is
transferred to Capital reserve. The Group‟s portion of equity in the subsidiaries is determined on the basis
of the book value of assets and liabilities as per the financial statements of the subsidiaries as on the date of
the investment.
The financial statements of the Parent Company and its subsidiaries have been combined on a line-by-line
basis by adding together the book values of like items of assets, liabilities, income and expenses, after
eliminating intra-group balances / transactions and resulting unrealised profits in full. The amounts shown
in respect of reserves / accumulated losses comprise the reserve / accumulated losses as per the balance
sheet of the Parent Company and its share in the post-acquisition increase / decrease in the relevant reserve /
accumulated losses of the subsidiaries.
F-17
The amount of goodwill and capital reserve are presented on a net basis for each Subsidiary.
Minority interest‟s share of profits or losses is adjusted against the income to arrive at the net income attributable to the shareholders. Minority interests‟ share of net
assets is disclosed separately in the Summary statements of the Group.
Joint venture entities
Interests in jointly controlled entities are accounted for using proportionate consolidation method.
The group consists of
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Reliance MediaWorks Entertainment
Services Limited (formerly known as
Digital Media Imaging Limited)
May 4, 2009 India 100% 100% 100% - -
Reliance Media Consultant Private
Limited
February 16,
2012
India 100% - - - -
Reliance MediaVentures Private
Limited
June 19, 2012 India 100% - - - -
Reliance MediaWorks Theatres
Limited (formerly known as Adlabs
Distributors and Exhibitors Limited )
May 19, 2003 India 100% 100% 100% 100% 100%
Big Synergy Media Limited January 12,
2007
India 51% 51% 51% 51% 51%
Sri Ramakrishna Theatres Limited
(Refer Note 10 below)
January 11,
2008
India - 89.68% 89.68% 89.68% 89.16%
Reliance MediaWorks (UK) Limited May 19, 2006 United Kingdom 100% 100% 100% 100% 100%
F-18
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Reliance MediaWorks (USA) Inc. May 17, 2006 United States of
America
100% 100% 100% 100% 100%
Reliance MediaWorks (Netherlands)
B.V.
February 8,
2008
The Netherlands 100% 100% 100% 100% 100%
Reliance MediaWorks (Mauritius)
Limited
March 20, 2008 Mauritius 100% 100% 100% 100% 100%
Rave Entertainment and Food Nepal
Private Limited (Refer note 12)
August 24,
2008
Nepal - 100% 100% 100% -
Big Cinemas Entertainment LLC December 19,
2007
United States of
America
100% 100% 100% 100% 100%
Big Cinemas Entertainment (DE)
LLC
January 24,
2008
United States of
America
100% 100% 100% 100% 100%
Adlabs Forum LLC (Refer note 7
below)
March 6, 2008 United States of
America
- - - 100% 100%
Big Cinemas Laurel LLC November 28,
2007
United States of
America
100% 100% 100% 100% 100%
Big Cinemas Falls Church LLC November 8,
2007
United States of
America
100% 100% 100% 100% 100%
Adlabs Heritage LLC (Refer note 7
below)
March 7, 2008 United States of
America
- - 100% 100% 100%
Big Cinemas Norwalk LLC March 14, 2008 United States of
America
100% 100% 100% 100% 100%
F-19
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Big Cinemas Galaxy LLC (Refer note
8 below)
December 21,
2007
United States of
America
100% 100% 51% 51% 51%
Big Cinemas Sahil LLC November 13,
2007
United States of
America
97% 97% 97% 100% 100%
Big Cinemas SAR LLC November 8,
2007
United States of
America
51% 51% 51% 51% 51%
Phoenix Big Cinemas Management
LLC
February 25,
2008
United States of
America
51% 51% 51% 51% 51%
Big Cinemas Union LLC (Refer note
7 below)
February 8,
2008
United States of
America
- - - 100% 100%
Big Cinemas Phoenix LLC February 22,
2008
United States of
America
51% 51% 51% 51% 51%
Big Cinemas Exhibitions LLC March 6, 2008 United States of
America
100% 100% 100% 100% 100%
Big Cinemas IMC LLC January 19,
2008
United States of
America
100% 100% 100% 100% 100%
Reliance Lowry Digital Imaging
Services Inc. (Refer note 9 below)
September 1,
2008
United States of
America
100% 100% 100% 90% -
Big Pictures USA Inc March 30, 2009 United States of
America
100% 100% 100% 100% -
Adlabs Digital Media LLC (Refer
note 7 below)
March 27, 2009 United States of
America
- - 100% 100% -
F-20
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Reliance Media and Marketing
Communications LLC
May 13, 2009 United States of
America
100% 100% 100% - -
Adlabs GlobalStar LLC (Refer note 7
below)
September 23,
2009
United States of
America
- - - - -
Reliance Media Works VFX Inc. January 25,
2010
United States of
America
100% 100% 100% - -
Reliance MediaWorks (Malaysia)
Sdn. Bhd. (Refer note 13)
April 18, 2008 Malaysia - 100% 100% 100% -
Reliance MediaWorks Big Cinemas
Sdn. Bhd. (Refer note 13)
November 1,
2008
Malaysia - 70% 70% 70% -
Adlabs Multiplex Limited (Refer note
1 below)
December 20,
2007
India - - - - 100%
Rave Entertainment Private Limited
(Refer Note 2 below)
May 31, 2007 India - - - - 100%
Adlabs Multiplexes and Theatres
Limited (Refer Note 3 below)
April 1, 2006 India - - - - 100%
Katch 22 Entertainment Private
Limited (Refer Note 4 below)
April 23, 2007 India - - - - -
Reliance Broadcast Network Limited
(Refer Note 5 below)
March 27, 2006 India - - - - 100%
F-21
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Joint ventures
Adlabs Multiplex Limited (Refer
Note 1 below)
NA India - - - - -
Swanston Multiplex Cinemas Private
Limited
NA India 50% 50% 50% 50% 50%
Divyashakti Marketing Private
Limited
NA India 50% 50% 50% 50% 50%
Cineplex Private Limited (Refer Note
11 below)
NA India - 50% 50% 50% 50%
Associates
Sultan Production Private Limited
(Refer Note 6 below)
NA India - - NA 49% 49%
F-22
Notes:
Note 1 – Adlabs Multiplex Limited („AML‟) was accounted as a Joint venture till the fifteen month period ended
June 30, 2007 and part of Period 2008. During Period 2008, the balance outstanding shares of AML were acquired
by the Parent Company and AML became a 100% subsidiary of the Parent Company. During Period 2009, effective
from April 1, 2008, AML was amalgamated with the Parent Company as per Scheme of Amalgamation for merger
of wholly owned subsidiaries.
(Refer note 2 of III of E of Annexure IV for details of Scheme of Amalgamation of AML with the Parent Company)
Note 2 – Rave Entertainment Private Limited („REPL‟) was amalgamated with the Parent Company during Period
2009, effective April 1, 2008 as per Scheme of Amalgamation for merger of wholly owned subsidiaries. (Refer note
2 of IV of E of Annexure IV for details of acquisition of shares of REPL by the Group and note 2 of III of E of
Annexure IV for details of Scheme of Amalgamation of REPL with the Parent Company)
Note 3 - Adlabs Multiplexes and Theatres Limited („AMTL‟) was a joint venture of the Parent Company up to April
1, 2006 with the Parent Company holding 50% interest in the Joint venture. Subsequently, the Parent Company
acquired the balance shares of AMTL and AMTL became a wholly owned subsidiary of the Parent Company
effective April 1, 2006. During Period 2009, effective from April 1, 2008, AMTL was amalgamated with the Parent
Company as per Scheme of Amalgamation for merger of wholly owned subsidiaries. (Refer note 2 of III of E of
Annexure IV for details of Scheme of Amalgamation of AMTL with the Parent Company).
Note 4 – Katch 22 Entertainment Private Limited („Katch 22) was merged with the Parent Company during period
2008 with effect from April 1, 2006 as per Scheme of Amalgamation of Katch 22 with the Parent Company. (Refer
note 3 of IV of E of Annexure IV for details of Scheme of Amalgamation). The shares of Katch-22 were acquired
effective April 23, 2007 and transactions of Katch 22 were not considered as part of consolidated financial
statements of fifteen month period ended June 30, 2007. However, no restatement adjustments have been made
pertaining to consideration of balances of Katch 22 in financial statements of fifteen month period ended June 30,
2007.
Note 5 – Reliance Broadcast Network Limited („RBNL‟) was considered as a subsidiary of the Parent Company till
March 31, 2006. During the fifteen month period June 30, 2007, as per Composite Scheme of Amalgamation and
Arrangement, the Radio Business of the Parent Company was to be demerged to Reliance Broadcast Network
Limited and the investment of the Group in RBNL was to be cancelled. The Composite Scheme of Amalgamation
and Arrangement was given effect to in the financial statements for the fifteen month period ended June 30, 2007,
on an in-principle basis and RBNL was not consolidated as a subsidiary for those financial statements.
Subsequently, the Company modified the Composite Scheme of Amalgamation and Arrangement, vide Modified
Composite Scheme of Amalgamation and Arrangement which was given effect to in the financial statements for
Period 2008 and accordingly RBNL was considered a subsidiary of the Parent Company and consolidated in the
results for Period 2008. During Period 2009, the Radio Business of the Company was demerged to RBNL as per
Scheme of Arrangement and the investment of the Parent Company in the shares of RBNL was deemed to be
cancelled. Accordingly RBNL was not considered as a subsidiary for the financials of Period 2009. (Refer note 1 of
IV of E of Annexure IV for details of Scheme of demerger of Radio business pursuant to Scheme of Arrangement)
Note 6 – The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of 20%.
This investment was made by the Company with the intention of investment in the movie "Sultan: The warrior".
However, during the Period 2010, the Company has issued a letter of termination and demanded refund for the
moneys paid by the Company towards production of the movie in the Joint venture and sale of shares held by the
Company to Orcher Studios Private Limited, as per a shareholders agreement signed by the Company, which has
been agreed to Orcher Studios Private Limited. Since, the Company has the intention of selling the shares, the
F-23
Company has decided not to consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23
'Accounting for Associates in consolidated financial statements.
During Period 2011, the shares in Sultan Production Private Limited have been sold by the Group
Note 7 – These Companies have been dissolved during the Period 2010 / Period 2011.
Note 8 – During Period 2011, as part of settlement with the minority holders, the Group has acquired the balance
49% stake in Big Cinemas Galaxy LLC.
Note 9 – During Period 2010, the Parent Company, acquired the balance 10% of the shares of Reliance Lowry
Digital Imaging Services Inc. from the external shareholders. The balance 90% of the shares are held by Reliance
MediaWorks (USA) Inc., a wholly owned subsidiary of the Parent Company.
Note 10 – During Period 2012 on May 27, 2011, the Parent Company, sold its shareholding in Sri Ramakrishna
Theaters Limited („SRTL‟) comprising of 89.68% of the issued equity share capital of SRTL, whereupon SRTL has
ceased to be subsidiary of the Company.
Note 11 – During Period 2012 on June 3, 2011, the Parent Company, sold its shareholding in Cineplex Private
Limited („CPL‟) comprising of 50% of the issued equity share capital of CPL, whereupon CPL has ceased to be
joint venture of the Company.
Note 12 – During Period 2012 on April 30, 2012, the Parent Company, sold its shareholding in Rave Entertainment
and Food Nepal Private Limited. The transfer of consideration for the same was subject to approval of regulatory
authorities and has been completed post the date of financial statements.
Note 13 – During Period 2012, on September 21, 2012, Reliance MediaWorks (Mauritius) Limited, a wholly owned
subsidiary of the Parent Company, has sold its entire holding in Reliance MediaWorks (Malaysia) Sdn. Bhd..
Consequently, Reliance Works (Malaysia) Sdn. Bhd. and its wholly owned subsidiary Reliance MediaWorks Big
Cinemas Sdn. Bhd. have ceased to be subsidiaries of the Company.
3. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles („GAAP‟)
in India requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amount
of income and expenses during the reported period. The estimates and assumptions used in the accompanying
summary statements are based upon managements‟ evaluation of relevant facts and circumstances as at the date
of the summary statements, which in its opinion are prudent and reasonable. Actual results could differ from
those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
4. Goodwill on consolidation
The excess of cost to the Parent Company of its investments over its portion of equity in the subsidiaries /
associates / joint ventures, as at the date on which the investment was made, is recognised as goodwill in the
summary statements of the Group. The Group‟s portion of equity in the subsidiaries / associates / joint ventures‟
is determined on the basis of the book value of assets and liabilities as per the financial statements of the
subsidiaries as on the date of investment.
F-24
Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The Group assesses the recoverability
of goodwill by reference to the valuation methodology adopted by it on the acquisition date, which included
strategic and synergic factors that were expected to enhance the enterprise value. Accordingly, the Group would
consider that there exists a decline other than temporary in the carrying value of goodwill when, in conjunction
with its valuation methodology, its expectations with respect to the underlying acquisitions it has made
deteriorates with adverse market conditions.
5. Fixed assets and depreciation / amortisation
a. Tangible assets
Tangible fixed assets are stated at cost and / or revalued amount in accordance with Scheme of Amalgamation
less accumulated depreciation and any provision for impairment. Cost includes freight, duties, taxes (other than
those recoverable from tax authorities) and other expenses related directly / indirectly to the acquisition /
construction and installation of the fixed assets and for bringing the asset to its working condition for its
intended use.
Depreciation on fixed assets is provided on the straight line method, at the rates prescribed in Schedule XIV to
the Act, which, in management‟s opinion, reflects the estimated useful lives of those fixed assets, except assets
of subsidiaries and a Joint Venture, namely Reliance MediaWorks (USA) Inc. (including its subsidiaries),
Reliance MediaWorks Big Cinemas Sdn. Bhd., Reliance MediaWorks (UK) Limited and Swanston Multiplex
Cinemas Private Limited and theatrical exhibition segment in India wherein depreciation is provided at
following rates:
Leasehold improvements / buildings are depreciated over the lower of the useful life of the asset and the lease
term, on a straight line basis.
Individual assets costing up to ` 0.05 lakhs are depreciated fully in the period of acquisition.
b. Intangible assets
Intangible assets, all of which have been acquired / created and are controlled through custody or legal rights,
are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are regarded
as having a limited useful economic life and the cost is amortised over the lower of useful life and ten years.
Application software purchased, which is not an integral part of the related hardware, is shown as an intangible
asset and amortised on a straight line basis over its useful life, not exceeding five / ten years, as determined by
management.
Particulars of fixed assets
Rate of depreciation
Plant and machinery 7.07% to 20%
Furniture and fixture 10% to 25%
Office equipments 10%
Computers 20%
Vehicles 10%
F-25
Film rights comprise negative rights and distribution rights in films and are for a contractually specified mode
of exploitation, period and territory and are stated at cost less accumulated amortisation. Cost of film rights
comprises original purchase price / minimum guarantee. Cost is ascertained on specific identification basis
where possible.
In case multiple films / rights are acquired for a consolidated amount, cost is allocated to each film / right
based on management‟s best estimates.
The individual film forecast method is used to amortise the cost of film rights acquired. Under this method,
costs are amortised in the proportion that gross revenues realised bear to management‟s estimate of the total
gross revenues expected to be received. If estimates of the total revenues and other events or changes in
circumstances indicate that the realisable value of a right is less than its unamortised cost, a loss is recognised
for the excess of unamortised cost over the film right‟s realisable value.
In respect of unreleased films, payments towards film rights are classified under capital advances as the
amounts are refundable in the event of non-release of the film.
Internally generated software is capitalised by the Group and amortised over its estimated useful life of five /
ten years.
Purchased goodwill is recognised by the Group on the basis of excess of purchase consideration paid over the
fair value of assets acquired at the time of acquisition of business and is amortised over, its estimated useful
life not exceeding ten years.
6. Impairment
In accordance with AS 28 – „Impairment of Assets‟, where there is an indication of impairment of the Group‟s
asset, the carrying amounts of the Group‟s assets are reviewed at each Balance sheet date to determine whether
there is any impairment. The recoverable amount of the asset (or where applicable, that of the cash generating
unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An
impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its
recoverable amount. Impairment loss is recognised in the statement of profit and loss.
If at the Balance sheet date there is an indicator that a previously assessed impairment loss no longer exists, the
recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject to a maximum
depreciated historical amount.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the
asset and from its disposal at the end of its useful life.
7. Investments
Long-term investments are carried at cost. A provision for diminution is made to recognise a decline, other than
temporary, in the value of long-term investments and is determined separately for each individual investment.
Current investments are carried at lower of cost and fair value.
F-26
8. Inventories
Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon lamps and stores and
spares related to theatrical exhibition / film production services business etc.) are stated at the lower of cost and
net realisable value. Cost is determined on the first-in first-out (FIFO) basis except in the case of Reliance
MediaWorks (USA), Inc. (and its subsidiaries), and Reliance MediaWorks Big Cinemas Sdn. Bhd. wherein the
Group uses the weighted average method.
Inventory of DVD‟s is stated at lower of cost or net realisable value, wherein cost is determined using weighted
average method.
Inventory of content cost not aired is stated at lower of cost and net realisable value.
9. Employee benefits
Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term
employee benefits. The undiscounted amount of short term employee benefits expected to be paid in exchange
for the services rendered by employees are recognised as an expense during the period.
Long term employee benefits:
Provident fund and other schemes
The Group‟s state governed provident fund scheme, employee state insurance scheme and labour welfare fund
are defined contribution plans. The contribution paid / payable under the schemes is recognised during the
Period in which the employee renders the related service.
Gratuity Plan
The Group‟s gratuity benefit scheme is a defined benefit plan. The Group‟s net obligation in respect of the
gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in
return for their service in the current and prior periods; that benefit is discounted to determine its present value
and the fair value of any plan assets is deducted.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuation
using the Projected unit credit method.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for
determining the present value of the obligation under defined benefit plan, are based on the market yields on
Government securities as at the Balance sheet date.
Actuarial gains and losses are recognised immediately in the statement of profit and loss.
Other Long term employment benefits:
Compensated absences which are not expected to occur within twelve months after the end of the period in
which the employee renders the related services are recognised as a liability at the present value of the defined
F-27
benefit obligation at the Balance sheet date, determined based on actuarial valuation using Projected unit credit
method. The discount rates used for determining the present value of the obligation under defined benefit plan,
are based on the market yields on Government securities as at the Balance sheet date.
10. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The amount recognised as revenue is exclusive of value added tax, service
tax and net of trade discounts.
Amount of entertainment tax is shown as a reduction from revenue.
Film production services
Revenue from processing / printing of cinematographic films is recognised upon completion of the related
processing / printing.
Revenue from processing of digital content is recognised using the proportionate completion method. Use of the
proportionate completion method requires the Group to estimate the efforts expended to date as a proportion of
the total efforts to be expended. Efforts expended have been used to measure progress
towards completion, as there is a direct relationship between efforts expended and contracted output.
Sale of traded goods is recognised when the risks and rewards of ownership are passed on to the customer,
which generally coincides with the dispatch of goods.
Income from equipment / facility rental is recognised over the period of the relevant agreement / arrangement.
Theatrical exhibition and related income
Sale of tickets
Revenue from theatrical exhibition is recognised on the date of the exhibition of the films and comprises
proceeds from sale of tickets, gross of entertainment tax. As the Group is the primary obligor with respect to
exhibition activities, the share of distributors in these proceeds is separately disclosed as Distributors‟ share.
Amount of entertainment tax is shown as a reduction from revenue where applicable.
Revenue from gift cards is recognised on the basis of availing the facility by the customer. At the time of sale,
the amounts received are recognised as deferred revenue.
Share of profit in partnership firm is recognised on the basis of audited financial statement of the Partnership
firm.
Sale of food and beverages
Revenue from sale of food and beverages is recognised upon sale and delivery at the counter.
Advertisement / sponsorship revenue
Revenue from advertisements, sponsorship and events is recognised on the date of the exhibition of the
advertisement / event or over the period of the contract or on completion of the Group‟s obligation, as
applicable.
F-28
Management fee is recognised as revenue on a time proportion basis as per the relevant agreement.
Television / film production, distribution and related income
Television / Film content production and related income
Revenue from sale of content / motion picture is accounted for on the date of agreement to assign / sell the
rights in the concerned motion picture / content or on the date of release of the content / motion picture,
whichever is later. Program sales are accounted on the delivery of tape to the channel.
Income from film distribution activity
In case of distribution rights of motion picture / content, revenue is recognised on the date of release /
exhibition.
Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is recognised
on the date when the rights are made available to the assignee for exploitation.
Revenue from sale of VCDs / DVDs, etc is recognised when the risks and rewards of ownership are passed on
to the customer, which generally coincides with the dispatch of the products.
Interest income / income from film financing
Interest income, including from film / content related production financing, is recognised on a time proportion
basis at the rate implicit in the transaction.
Dividend income
Dividend income is recognised when the right to receive dividend is unconditional at the balance sheet date.
Marketing Rights / Rights to profit
Amounts received in lieu of future marketing rights sale, right to future profit from business of the Group and
other rights are recognised as income in the period of entering into the contract.
11. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the
transactions. Exchange differences arising on foreign exchange transactions settled during the period are
recognised in the statement of profit and loss of the period.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at
the closing exchange rates on that date; the resultant exchange differences are recognised in the statement of
profit and loss except in case of exchange differences arising on translation of monetary items which form part
of Group‟s net investment in a non-integral foreign operation which is accumulated in a „Foreign currency
translation reserve‟ until its disposal.
Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction.
F-29
Forward contracts are entered into to hedge the foreign currency risk of the underlying transaction. The
premium or discount on all such contracts arising at the inception of each contract is amortised as income or
expense over the life of the contract. Exchange difference on forward contracts is recognised as income or
expense in the statement of profit and loss of the period. Any profit or loss arising on the cancellation and
renewal of forward contract is recognised as income or expense for the period.
12. Foreign currency translation
The consolidated financial statements are reported in Indian rupees in accordance with AS-11 – „The Effects of
Changes in Foreign Exchange Rates‟ which specifies translation of foreign subsidiaries on the basis of their
classification as integral / non-integral to the operations of the Parent Company.
Local currency financials of each integral foreign subsidiary within the Group into Indian Rupees is performed
in respect of assets and liabilities other than fixed assets, using the exchange rate in effect at the balance sheet
date and for revenue and expense items other than the depreciation costs, using average exchange rate during
the reporting period. Net exchange difference resulting from the above translation of the financial statements of
integral foreign subsidiaries is recognised in the consolidated statement of profit and loss. Fixed assets are
translated at exchange rates on the date of the transaction and depreciation on fixed assets is translated at
exchange rates used for translation of the underlying fixed assets.
Translation of local currency balances of each non-integral foreign subsidiary within the Group into Indian
Rupees is performed in respect of assets and liabilities at the exchange rate in effect at the Balance sheet date
and for revenue and expense items at the average exchange rate during the reporting period. Net exchange
differences resulting from the above translation of the financial statements is accumulated in a „Foreign
currency translation reserve‟, disclosed as Reserves and surplus. The amount accumulated will be held in this
account till the time of disposal of the net investment in the subsidiary.
13. Earnings per share
In determining earning per share, the Group considers the net result after tax and includes the post tax effect of
any extraordinary / exceptional item. The number of shares used in computing basic earnings per share is the
weighted average number of shares outstanding during the period. The number of shares used in computing
diluted earning per share comprises the weighted average number of shares considered for deriving basic
earnings per share and also the weighted average number of shares that could have been issued on the
conversion of all dilutive potential equity shares unless the results would be anti-dilutive. Dilutive potential
equity shares are deemed converted as of the beginning of the period, unless issued at a later date.
14. Taxation
Income-tax expense comprises current tax expense and fringe benefit tax computed in accordance with the
relevant provisions of the Income tax Act, 1961 / local Income tax regulations of the respective countries of
operation of the Group and deferred tax charge or credit.
Current tax provision is made based on the tax liability computed after considering tax allowances and
exemptions, in accordance with the Income tax Act, 1961 / local Income tax regulations of the respective
countries of operation of the Group. Deferred tax charge or credit and the corresponding deferred tax liability or
asset is recognised for timing differences between the profits / losses offered for income tax and profits / losses
as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws
that have been enacted or substantively enacted at the Balance sheet date.
F-30
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised
in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred
tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are
reviewed as at each Balance sheet date and written down / up to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
Provision for fringe benefit tax is made on the basis of applicable rates on the taxable value of eligible expenses
of the Group as prescribed under the Income Tax Act, 1961 till Period 2009 on the basis of applicability.
15. Share issue / Foreign Currency Convertible Bonds (FCCB) issue expenses and premium on redemption.
Share / FCCB issue expenses incurred and premium payable on FCCB are adjusted in the period of issue
against the Securities premium reserve.
16. Provisions and contingencies
Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Group
recognises it has a present obligation as a result of past events, it is more likely than not that an outflow of
resources will be required to settle the obligation and the amount can be reasonably estimated.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not require an outflow of resources. When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
made.
Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is
probable that a liability has been incurred and the amount can be reasonably estimated.
17. Leases
Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases are recorded on a
straight line basis over the lease term.
18. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are
capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period
of time to get ready for its intended use. All other borrowing costs are charged to revenue.
19. Commercial papers
Commercial papers issued are recognised as a liability, at the amount of cash received at the time of issuance
i.e. discounted value. The discount is amortised as interest cost over the period of the commercial paper, at the
rate implicit in the transaction.
F-31
B. Significant changes in accounting policies and other adjustments (debited) / credited to the restated
financial statements:
(` in lakhs)
Particulars Refer
Note
below
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment
to opening
balance in
the
statement
of profit
and loss as
at July 1,
2007
(Loss) / profit after tax
as per audited financial
statements
(91,047.40) (32,886.10) (14,320.80) (5,787.10) 4,731.50
Balances as per audited
financial statements
9,786.53
Adjusted for
Change in depreciation
method
(a)
- - (130.28) (853.29) 371.29 464.15
Change in estimated useful
life
(b)
- - - - - (218.77)
Restatement of FCCB‟s (c) - 1,272.40 1,718.10 (1,130.10) (1,860.40) -
Prior period adjustment
(net)
(d)
- - - - (0.40) 0.40
Effect of qualification –
deferred revenue
expenditure
(e)
520.19 (1,734.00) - - - -
Miscellaneous expenditure
not written off, adjusted in
opening balance
(f)
- 2.50 2.56 0.74 9.45 (15.25)
Prior period – tax
Excess / (short) provision
for tax
(g)
46.40 (7.60) (72.82) (36.50) (10.61) 81.13
Excess / (short) provision
for Minimum alternative
tax
(g)
- - - - (1,242.60) 1,242.60
Net impact of all
adjustments
566.59 (466.70) 1,517.56 (2,019.15) (2,733.27) 1,554.11
F-32
Particulars Refer
Note
below
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment
to opening
balance in
the
statement
of profit
and loss as
at July 1,
2007
Current tax impact of
adjustments
Deferred tax impact of
adjustments
(g)
(535.81) 535.81 - (6.46) 0.29 0.08
(Loss) / Profit after tax as
per restatement
(91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52
Balances as per
restatement as on July 1,
2007
11,340.87
a) Change in accounting policy for depreciation
During Period 2009, the Group has charged depreciation as per the written down value method in the film
production services, production and distribution business and for unallocated assets at the rates specified in
Schedule XIV of the Companies Act, 1956 till March 31, 2008. Starting April 1, 2008, the Group has
changed its policy to charge depreciation as per the straight line method at the rates specified in Schedule
XIV of the Companies Act, 1956. Accordingly, depreciation charge for the previous period‟s has been
restated based on the new method and the impact of change in depreciation method for the period prior to
July 1, 2007 has been adjusted to opening balance of the surplus in statement of profit and loss, as restated
as on July 1, 2007.
b) Change in estimated useful life of assets
The Group had revised the estimated useful lives of certain fixed assets pertaining to the theatrical
exhibition business from July 1, 2007, since in the opinion of the management, the revised useful life
reflect the estimated period of economic benefit to be derived from the use of such assets. For the purpose
of these summary statements, depreciation has been recomputed based on revised useful life of the assets
from the date of capitalisation of these assets. Accordingly depreciation for the periods prior to July 1, 2007
has been restated and depreciation for these periods has been adjusted to opening balance of the surplus in
statement of profit and loss, as restated as on July 1, 2007.
c) Accounting for Foreign Currency Convertible Bonds („FCCB‟)
During Period 2008, the liability for FCCB‟s had been reclassified as a non-monetary liability inter-alia on
the basis of the trend of earnings, movement of the Parent Company‟s share prices and conversion option
exercised by the FCCB holders (bondholders holding 75.42% of the FCCB had exercised conversion option
F-33
as of March 31, 2008). However, during Period 2011, the balance FCCB‟s were redeemed at a premium, as
per the terms of the issue document.
The Company had reversed foreign exchange fluctuation loss aggregating to ` 438.06 lakhs in Period 2008
based on the consideration of FCCB‟s as a non-monetary liability. This position was carried forward till
Period 2010 and was a matter of emphasis referred to in the auditors report for Period 2008, 2009 and 2010.
Hence, the Company has reversed the reversal made during Period 2008 and recognised the loss / gain on
the non-converted portion of FCCB‟s, considering them as a monetary item in Period 2008, 2009 and 2010
and reversed this loss in Period 2011, wherein the Company has recognised the entire loss on redemption in
its audited financial statements.
d) Prior period adjustments (net)
Prior period adjustments pertain to under accrual of expenses by Subsidiaries and Joint ventures. The
amount pertains to period‟s prior to July 1, 2006 and hence the same has been adjusted against the opening
balance of the surplus in statement of profit and loss, as restated as of April 1, 2006.
e) Deferred revenue expenditure
Reliance MediaWorks Entertainment Services Limited, a subsidiary of the Group had recognised deferred
revenue expenditure for start up and stabilisation costs during Period 2011, which was a subject matter of
qualification by the auditors of the Subsidiary in Period 2011. The Group has reversed the accounting
treatment followed by the Subsidiary regarding recognition of deferred revenue expenditure and has
appropriately charged off the expenditure in the Statement of profit and loss, as restated.
The deferred revenue expenditure was amortised over a period of 5 years starting Period 2012, which has
been appropriately reversed in the Statement of profit and loss, as restated of Period 2012.
f) Miscellaneous expenditure not written-off
The Group has written off the balances of miscellaneous expenditure as of July 1, 2007 to the opening
balance of surplus of statement of profit and loss, as restated as on April 1, 2006 and has consequently
reversed the charge made for write off made in Period 2008, 2009, 2010 and 2011.
g) Tax impact on restatement
The statement of profit and loss, as restated of some periods include amounts paid / provided for or
refunded / written back, in respect of shortfall / excess income tax (including fringe benefit tax) arising out
of assessments, appeals etc. which has now been adjusted in the respective period‟s tax liability. Also,
income tax (current tax and deferred tax) has been computed on adjustments made and has been adjusted
accordingly in the statement of profit and loss, as restated for the respective periods.
h) Consequent to the notification of the Companies (Accounting Standards) Rules, 2006, with effect from July
1, 2007, the Group adopted Accounting Standard (AS 15) - Employee Benefits. However, there was no
significant impact on adoption of the Standard which is required to be adjusted to the opening balance of
reserves and surplus.
i) Adjustments have been made in the Restated Summary Statements, wherever required, by a reclassification
of the corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the
groupings as per the audited financials of the Group for Period 2012 as prepared under Government
F-34
Notification no. S.O. 447 (E) dated February 28, 2011 (as amended by notification no. F.No/2/6/2008-CL-
V dated March 30, 2011), read with General Circular no. 62/2011 dated September 5, 2011, issued by the
Ministry of Company Affairs.
j) The Company in Period 2009 has classified its operations in US and in Period 2010 its operations in Nepal
as non-integral to the operations of the Parent Company in India. The impact of this change is not material
on the results of respective periods and hence, no restatement has been made for the same.
k) De-merger of Radio Business
During the year ended March 31, 2006 the Company commenced operations of the Radio business. The
Company was granted 45 FM Radio operation licenses in various parts of India including all metros.
During the fifteen month period ended June 30, 2007, the Board of Directors and members of the Company
and the Hon‟ble High Court of Judicature at Bombay approved the Composite Scheme of Amalgamation
and Arrangement („Composite Scheme‟) which among other things provided for demerger of the Radio
business of the Company to Reliance Broadcast Network Limited with effect from April 1, 2006. The
Company had given the in-principle effect of the Composite Scheme including the demerger of the Radio
business of the Company to Reliance Broadcast Network Limited in the accounts for the fifteen month
period ended June 30, 2007 pending filing of the Scheme with the Registrar of Companies. Subsequently,
due to non-receipt of approval from the Ministry of Information and Broadcasting, the Company filed the
Modified Composite Scheme of Amalgamation and Arrangement (the „Modified Composite Scheme‟)
which provided for reversal of the effect of demerger, of the Radio business that was given effect to in the
accounts for the fifteen month period ended June 30, 2007 and provided for adjusting the net result of the
transactions related to Radio business for the period March 31, 2006 till the effective date of the Modified
Composite Scheme i.e. March 31, 2008 in the General reserve account of the Company.
During Period 2009, the Board of Directors and members of the Company and the Hon‟ble High Court of
Judicature at Bombay approved a Scheme of Arrangement which provides for demerger of the Radio
business of the Company effective April 1, 2008 to Reliance Broadcast Network Limited.
Accordingly, transaction related to Radio business does not form part of the statement of profit and loss, for
Period 2008. However, the assets and liability were included in the summary statement of assets and
liability in Period 2008. The assets and liabilities of the Radio business for Period 2008 which are included
in the statement of assets and liability of the Group are:
Particulars Period 2008
(` in lakhs)
Fixed assets Gross block 32,728.23
Less: Accumulated depreciation 3,845.38
Net block 28,882.85
Capital work in progress 2,309.17
Current assets Inventories 17.67
F-35
Particulars Period 2008
(` in lakhs)
Sundry debtors 6,679.51
Cash and bank balances 843.71
Loans and advances 6,387.06
13,927.95
Current liabilities and provisions Current liabilities 4,348.71
Provisions 626.94
4,975.65
Net working capital 8,952.30
Less: Loans 2,046.28
Net Capital employed 38,098.04
(Refer note 1 of V of E of Annexure IV for details of the Modified Composite Scheme of Amalgamation
and Arrangement giving effect to in the accounts of the Company for Period 2008 and note Refer note 1 of
IV of E of Annexure IV for details of the Scheme of arrangement given effect to in the accounts of the
Group for Period 2009)
C. Auditors‟ qualification
a. Period 2012
i. As reproduced below, auditors have qualified their audit report for Period 2012 for recognition
of deferred revenue expenditure
We draw attention to Note 49 to the consolidated financial statements regarding recognition of Deferred
Revenue Expenditure aggregating to ` 1,213.80 lakhs pertaining to start-up and stabilization costs of the
business, by Reliance MediaWorks Entertainment Services Limited (Formerly known as Digital Media
Imaging Limited), a subsidiary of the Company. As opined by the auditor of the subsidiary, such
recognition is not in accordance with Accounting Standard 26 – „Intangible Assets.
Had the Group recognised the above loss and such costs, the loss before tax and deficit in Statement of
profit and loss as at period ended September 30, 2012 for the Group would be higher by ` 1,213.8 lakhs.
(Refer note (e) of B of Annexure IV for effect of restatement of the qualification)
b. Period 2011
i. As reproduced below auditors have qualified their audit report for Period 2011 for recognition of
deferred revenue expenditure. The qualification is re-produced as follows:
F-36
As more fully explained in note 15 of Schedule 23 to the consolidated financial statements, the financial
statements of Reliance MediaWorks Entertainment Services Limited, a subsidiary, has been qualified on
account of treatment of start up and stabilisation costs of the film production services segment
aggregating to ` 1,734.00 lakhs as deferred revenue expenditure, which is not in accordance with
Accounting Standard 26 – „Intangible Assets‟, prescribed in the Companies (Accounting Standards)
Rules, 2006. Had the Subsidiary not followed the said accounting treatment, the loss for the current
year would have been higher by ` 1,734.00 lakhs and consequentially the Debit balance in Profit and
Loss Account would have been higher by ` 1,734.00 lakhs.
The management has adjusted the effect of the qualification in the restated statements of the Group.
(Refer note (e) of B of Annexure IV for effect of restatement of the qualification)
D. Extract of other matters / matter of emphasis referred by auditors in their reports as reproduced
below:
a. Period 2012
i) Without qualifying our report, we draw attention to note 37 to the consolidated financial
statements; the Group‟s net worth is fully eroded and has a negative net worth of ` 56,562.80
lakhs, the Group has incurred a loss of ` 91,047.40 lakhs for the eighteen month period April 1,
2011 to September 30, 2012, indicating the existence of uncertainty that may cast doubt about the
Group‟s ability to continue as a going concern. Considering the matters set out in the said note,
this consolidated financial statement is prepared on a going concern basis.
(Refer note 5 of I of E of Annexure IV)
b. Period 2010
i) Without qualifying our report, we draw attention to note 8 of schedule 22 to the financial
statements regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the
financial period ended March 31, 2008, the Company re-classified the liability towards FCCB as
non–monetary liability inter-alia on the basis of the trend of earnings, movement of the
Company‟s share prices and conversion option exercised by the FCCB holders. The Company
continues to classify the liability towards FCCB as non–monetary liability as in its view the
current fall in the market price of the Company‟s share price and non-conversion by bond holders
is a temporary aberration, consequently, the foreign exchange fluctuation gain for the year
aggregating ` 1,718.10 lakhs has not been recognised and the said liability has not been restated at
the year-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be
restated at the year-end exchange rate in accordance with Accounting Standard 11 - „The Effects
of Changes in Foreign Exchange Rates‟ prescribed in the Companies (Accounting Standards)
Rules, 2006. There is no specific guidance of The Institute of Chartered Accountants of India on
accounting for foreign currency bonds convertible into equity shares at the option of the holder.
Had the said liability been considered as a monetary liability as before, the loss before tax for the
current year would be lower by ` 1,718.10 lakhs and the reserves and surplus would be lower by `
1,272.30 lakhs.
(Refer note 5 of III of E of Annexure IV for note 17 of Schedule 22 which has been referred to
above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
F-37
c. Period 2009
i) Without qualifying our report, we draw attention to Note 10 of Schedule 22 to the consolidated
financial statements regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟).
During the previous financial period ended March 31, 2008, the Company reclassified the liability
towards FCCB as non–monetary liability inter-alia on the basis of the trend of earnings, movement
of the Company‟s share prices and conversion option exercised by the FCCB holders. The
Company continues to classify the liability towards FCCB as non– monetary liability as in its view
the current fall in the market price of the Company‟s share price and non conversion by bond
holders during the year is a temporary aberration, consequently, the foreign exchange fluctuation
(net loss) for the year aggregating ` 1,130.10 lakhs has not been recognised and the said liability
has not been restated at the period-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be
restated at the period-end exchange rate in accordance with Accounting Standard 11 - „The Effects
of Changes in Foreign Exchange Rates‟ prescribed in the Companies (Accounting Standards)
Rules, 2006 issued by the Central government in consultation with the National Advisory
Committee on Accounting Standards. There is no specific guidance of The Institute of Chartered
Accountants of India on accounting for foreign currency bonds convertible into equity shares at
the option of the holder. Had the said liability been considered as a monetary liability, the loss
before tax for the current year would be higher by ` 1,130.10 lakhs and the reserves and surplus
would be lower by ` 2,990.40 lakhs.
(Refer note 7 of IV of E of Annexure IV for note 10 of Schedule 22 which has been referred to
above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
ii) Without qualifying our opinion, we draw attention to Note 2 of Schedule 22 to the financial
statements. As more fully explained in the said Note, during the year, the Hon‟ble High Court of
Judicature at Mumbai vide its order dated May 8, 2009 sanctioned the Scheme of Amalgamation
of the Company with its wholly owned subsidiaries Adlabs Multiplexes and Theatres Limited,
Adlabs Multiplex Limited, Rave Entertainment Private Limited and Mahimna Entertainment
Private Limited, under sections 391 to 394 of the Act. Pursuant to the said Scheme the Company
has the made an adjustment for diminution in value of its assets (production and distribution
rights, fixed assets, investments, debtors and loans and advances) aggregating ` 15,669.70 lakhs
by debiting the same to capital reserve instead of the statement of profit and loss. Had the
Company debited the statement of profit and loss the loss before tax for the year would be higher
by the said amount.
(Refer note 2 of IV of E of Annexure IV for note 2 of Schedule 22 which has been referred to above)
d. Period 2008
i) Without qualifying our report, we draw attention to Note 1 of Schedule 22 to the financial
statements. As more fully explained in the said Note, during the period, the Hon'ble High Court of
Judicature at Bombay vide its order dated March 7, 2008 sanctioned the Modified Composite
Scheme of amalgamation and arrangement ('the Modified Scheme') between the Company,
Entertainment One India Limited ('E-ONE') and Mukta Adlabs Digital Exhibition Private Limited
F-38
('MADEL')#. The Scheme was filed with the Registrar of Companies ('ROC') on March 31, 2008.
Pending completion of licensing and other procedural formalities, the original Composite Scheme
of amalgamation and arrangement between the Company, E-ONE, MADEL#, Reliance Unicom
Limited ('RUL')## and their respective shareholders and creditors sanctioned by the Hon'ble High
Court of Judicature at Bombay vide its order dated September 15, 2006 was not filed with the
Registrar of Companies ('ROC') as required under Section 391(3) of the Companies Act, 1956
('the Act'). However, the said original Scheme was given effect to by the Company's management
in the previous period's financial statements for the fifteen months ended June 30, 2007, so as to
give effect to the substance of the Scheme as approved by the Hon'ble High Court of Judicature at
Bombay. The Modified Scheme inter-alia provides that the net results of the transactions related to
the radio business of the Company for the period from March 31, 2006 to the Effective date (i.e.
the date of filing the Modified Scheme with the ROC) be adjusted in the General reserve account
of the Company (the original scheme provided for the demerger of the radio business of the
Company to RUL## effective March 31, 2006). As the original scheme was given effect to in the
previous period's financial statements for the fifteen months ended June 30, 2007, only the
modifications to the original scheme have been given effect to in the current period's financial
statements (including reversal of demerger of radio business to RUL##).
# - The name of the Company was subsequently changed to Adlabs Multiplex and Theatres
Limited
## - The name of the Company was subsequently changed to Reliance Broadcast Network Limited
(Refer note 1 of V of E of Annexure IV for note 1 of Schedule 22 which has been referred to
above)
ii) Without qualifying our report, we draw attention to Note 16 of Schedule 22 to the financial
statements regarding accounting of the Foreign Currency Convertible Bonds ('FCCB'). During the
current period, the Company reclassified the liability towards FCCB as non-monetary liability
inter-alia on the basis of the trend of earnings and movement of the Company's share prices.
Accordingly, the foreign exchange fluctuation (net loss) aggregating to ` 438.10 lakhs accounted
in previous period has been reversed and the foreign exchange fluctuation loss for the current
period aggregating to ` 3,621.80 lakhs has not been recognised by management and the said
liability has not been revalued at the period-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be
revalued at the period-end exchange rate in accordance with Accounting Standard 11 - 'The
Effects of Changes in Foreign Exchange Rates' prescribed in the Companies (Accounting
Standard) Rules, 2006 issued by the Central Government in consultation with the National
Advisory Committee on Accounting Standard. There is no specific guidance of The Institute of
Chartered Accountants of India on accounting for foreign currency bonds convertible into equity
shares at the option of the holder. Had the said liability been considered as a monetary liability as
before, the profit after tax would be lower by ` 4,118.90 lakhs.
(Refer note 7 of V of E of Annexure IV for note 21 of Schedule 22 which has been referred to
above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
F-39
E. Extract of significant notes from audited financial statements
I. Period 2012
1. Lease disclosure under AS 19 – „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Amount payable within lock-in-period is ` 79,927.10 lakhs
Amount debited to statement of profit and loss for lease rental is ` 30,455.10 lakhs (excluding amount
capitalised ` 268.30 lakhs).
2. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
September 30,
2012 Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited (up to June 3, 2011) India Nil
Divyashakti Marketing Private Limited India 50%
Details of Joint Venture
Particulars Period 2012
Balance Sheet
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 111.50
(b) Reserves and surplus (89.90)
As at
September 30,
2012
For the Parent Company / Subsidiaries companies
Amounts due within one year from the Balance sheet date 15,846.90
Amounts due in the period between one year and five years 50,170.40
Amount due after five years 67,363.60
133,380.90
F-40
Particulars Period 2012
LIABILITIES
Non-current liabilities
(a) Long term borrowing 211.70
(b) Other long-term liabilities 0.50
(c) Long-term provisions 0.30
Current liabilities
(a) Trade payable 79.80
(b) Other current liabilities 47.50
Total 361.40
ASSETS
Non-current assets
(a) Fixed assets
Tangible assets 206.50
(b) Long-term loans and advances 70.30
Current assets
(a) Inventories 3.70
(b ) Trade Receivables 23.40
(c) Cash and cash equivalents 30.40
(d) Short-term loans and advances 11.90
(e) Other current assets 15.20
Total 361.40
Statement of Profit and loss
Revenue
(a) Revenue from operations 1,109.80
(b) Other income 8.70
Total Revenue 1,118.50
Expenses
Direct operation expenses 525.90
Employee benefit expense 57.20
Finance cost 1.10
Depreciation / amortisation expense 102.50
Other expenses 642.50
Total Expenses 1,329.20
F-41
Particulars Period 2012
(Loss) before tax (210.70)
Tax Expenses
(1) Current tax 17.50
(2) Deferred tax (credit)/ charge 0.10
(Loss) for the period (228.30)
OTHER MATTERS
1. Contingent Liabilities 98.00
2. Capital Commitments Nil
Movement of the aggregate Shareholders‟ funds of the Joint ventures:
Shareholders‟ funds as at beginning of the period 423.90
Add: Issue of shares by joint venture 125.00
Add: Share of (loss) / profits for the period (228.30)
Effect of disposal of joint ventures (299.00)
Shareholders‟ funds as at the end of the period 21.60
Note:
Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Company has decided to provide for diminution in the value of investments in
the Joint Venture amounting to ` 825.06 lakhs.
3. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Currency Period 2012
Amount – foreign
currency (lakhs)
Amount – (` in lakhs)
Trade and other receivables USD 184.90 9,762.70
GBP 24.80 2,117.30
MYR 15.10 262.60
MUR 174.30 312.50
Trade and other payables USD 114.70 6,056.20
GBP 7.00 597.60
EURO 0.40 27.20
MYR 0.10 1.70
MUR 34.50 61.90
F-42
Currency Period 2012
Amount – foreign
currency (lakhs)
Amount – (` in lakhs)
Loans / Buyers credit USD 158.60 8,374.10
Cash and bank balances USD 39.30 2,075.00
GBP 6.80 580.50
EURO 0.10 6.80
4. Movement of Goodwill
Particulars Period 2012
(` in lakhs)
Opening balance of Goodwill 8,819.42
Impact for Subsidiaries sold during the period / year (3,196.30)
Impact of exchange differences 14.80
Impact of impairment for a Joint venture (492.60)
5,145.32
5. Considering the continuing substantial losses incurred by the Group / Parent Company, its net worth has
been eroded. However, having regard to improved operational performance on account of stabilisation of
new businesses in films and media services, financial support from its promoters, further restructuring
exercise being implemented etc, the financial statements of the Company have been prepared on the basis
of going concern and no adjustments are required to the carrying value of assets and liabilities.
6. The Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in the Company‟s film and media
services division. The investment is proposed to be made into the subsidiary of the Company, into which
our film and media services division will be transferred. No definitive agreement has been executed in
respect of the proposed transaction. Though exclusivity period as per non-binding term sheet has been
expired on October 15, 2012, the Company and the fund are in process of extending exclusivity period.
7. The shareholders of the Parent Company have approved on February 21, 2012 through postal ballot the
resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings pertaining to the
Film & Media Services and Exhibition business on a going concern basis to its wholly owned subsidiaries
at consideration not less than tax written down values as the board may decide and on such terms and
conditions and in such manner as may be decided by the board and the wholly owned subsidiaries. Since
necessary approval from lenders and other appropriate authorities are still awaited, the Company has not
executed relevant agreements with its subsidiaries. The appropriate accounting treatment / disclosures will
be given once the requisite approvals are obtained.
8. During Period 2012, the Company has dropped several properties under development / completed
properties and hence has written off the carrying value of capital work-in-progress of ` 4,424.60 lakhs and
deposits of ` 981.50 lakhs pertaining to these properties.
9. Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Group has decided to write down the value of its goodwill amounting to ` 492.60 lakhs.
F-43
10. Reliance MediaWorks (USA) Inc., a Subsidiary acquired the assets of Digital Domain Media Group Inc.‟s
(„DDMG‟) VFX and commercial business jointly through an auction process with Beijing Galloping Horse
Media Co., Ltd („Galloping Horse‟) and has agreed to hold 30% units of Galloping Horse America, LLC, a
special purpose entity incorporated by Galloping Horse for the purpose of acquisition of these assets of
DDMG. The Subsidiary is in the process of entering in an agreement with Galloping Horse. Hence, the
amounts advanced by the Subsidiary to the special purpose vehicle has been treated as advances given
towards share application.
11. During Period 2012, the Company has sold its shareholding in
a) A joint venture - Cineplex Private Limited effective June 3, 2011
b) Subsidiaries – Sri Ramakrishna Theatres Limited effective May 28, 2011, Rave Entertainment and
Food Nepal Private Limited effective April 30, 2012, Reliance MediaWorks (Malaysia) Sdn. Bhd.
effective September 21, 2012 and Reliance MediaWorks Big Cinemas Sdn. Bhd. (formerly known
as Big Cinemas Lotus Five Star Sdn. Bhd.) effective September 21, 2012
12. Exceptional items includes:
a) Loss on sale of investment in subsidiaries in Malaysia, which operated in the theatrical exhibition
business aggregating to ` 2,722.90 lakhs
b) Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary of
Digital Domain Media Group Inc. ('DDMG') for various services rendered. On September 11,
2011, DDMG along with all its subsidiaries filed for bankruptcy proceedings in the United States
of America. The amount provided for outstanding balances is ` 2,774.80 lakhs
c) Loss on Litigation settlement by US subsidiary of ` 2,683.90 lakhs. The subsidiary was a
defendant in a law suit regarding termination of a lease. During the previous year, the said
subsidiary received an adverse order for claim of damages by the landlord to the tune of USD 4.9
million. The US Supreme Court has denied an appeal filed by the subsidiary Company.
Accordingly, the Subsidiary has made a provision of ` 2,683.90 lakhs for such claim along with
other charges payable as per the order. Considering its nature same has been disclosed as an
exceptional item.
13. For Period 2012, subsidiaries in USA and Nepal have been considered as non-integral and subsidiaries in
UK, Malaysia, Mauritius and Netherlands have been considered as integral to the operations of the Parent
Company in India.
14. Interest and finance charges (net) include loss on derivative transactions (net) of ` 5,966.80 lakhs.
II. Period 2011
1. Lease disclosure under AS 19 - „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Period 2011
(` in lakhs)
For the Parent Company / Subsidiary Companies
Amounts due within one year from the balance sheet date 14,312.10
F-44
Particulars Period 2011
(` in lakhs)
Amounts due in the period between one year and five years 61,643.10
Amount due after five years 84,795.60
160,750.80
For Joint ventures (Group's share)
Amounts due within one year from the balance sheet date 193.00
Amounts due in the period between one year and five years 176.90
369.90
Amount payable within lock-in-period is ` 102,125.80 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 17,114.60 lakhs excluding amount
capitalised ` 906.20 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Group has assigned the derivative contract pertaining to Interest rate swap for long term loans to a
Company (Assignee), who has advised the Group regarding entering into these contracts. The
Assignee had advised the Group with regards to entering into these derivative contracts and has
indemnified the Company with regards to any mark to market losses that the Group will have to incur
on termination of these contracts. Consequently, the total mark to market loss of ` 1,921.40 lakhs has
not been recognised by the Group in its statement of profit and loss.
For the same reason, the Group has also not recognised a liability for these MTM losses and amounts
receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporatio
n
% of ownership
interest as at
March 31, 2011
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divyashakti Marketing Private Limited India 50%
Details of Joint ventures
Particulars Period 2011
(` in lakhs)
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 74.00
(b) Reserves and surplus 349.90
F-45
Particulars Period 2011
(` in lakhs)
Share application money, pending allotment 125.00
LIABILITIES
Non-current liabilities
(a) Long-term borrowings 383.00
(b) Deferred tax liabilities (net) 38.40
(c) Other long-term liabilities 4.30
(d) Long-term provisions 1.00
Current liabilities
(a) Trade payables 103.70
(b) Other current liabilities 48.30
(c) Short-term provisions 80.30
Total 1,207.90
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets (including capital work-in-progress) 761.90
(b) Long-term loans and advances 168.00
Current assets
(a) Current investments 10.40
(b) Inventories 11.80
(c ) Trade receivables 84.60
(d) Cash and bank balances 33.90
(e) Short-term loans and advances 101.10
(f) Other current assets 36.20
Total 1,207.90
Statement of profit and loss
(a) Revenue from operations 1,093.00
(b) Other income 9.30
Total revenue 1,102.30
Expenses
Direct operational expenses 540.10
Employee benefits expense 54.40
Finance costs (net) 14.30
Depreciation / amortisation expense 112.00
Other expenses 419.60
Total expenses 1,140.40
F-46
Particulars Period 2011
(` in lakhs)
Loss before tax (38.10)
Tax expenses
(1) Current tax 30.30
(2) Deferred tax (credit) (1.00)
Loss for the period (67.40)
OTHER MATTERS
1. Contingent liabilities 116.20*
2. Capital commitments Nil
*amount is not quantifiable in case of joint venture
Movement of the aggregate reserves of the joint ventures:
Reserves as at beginning of the period 491.30
Add: Share of loss for the period (67.40)
Reserves as at the end of the period 423.90
4. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Particulars Currency Period 2011
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
Trade and other receivables USD 57.00 2,587.80
GBP 9.50 691.60
EURO 0.70 44.80
NPR 375.80 242.60
MYR 34.60 519.70
SGD 0.40 14.40
MUR 174.30 288.80
Trade and other payables USD 56.50 2,564.90
GBP 7.60 553.20
EURO 0.40 25.60
MYR 99.30 1,491.30
NPR 72.30 46.70
MUR 1.10 1.80
Loans / Buyers credit USD 147.70 6,705.10
MYR 53.20 799.00
Cash and bank balances USD 13.40 608.30
MYR 22.00 330.40
NPR 157.20 101.50
GBP 4.10 298.40
EURO 0.30 19.20
MUR 0.40 0.70
F-47
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible
Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs which were
convertible at any time on or after March 7, 2006 and up to the close of the business on January 19, 2011
by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company with full
voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in Terms and
Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `
54.26=EUR 1.00. The Bonds were listed on the Singapore Exchange Securities Trading Limited („SGX
ST‟). Of the above, bondholders holding bonds of value Euro 633.50 lakhs opted for conversion in period
ended March 31, 2008. During the year ended March 31, 2009, the Company demerged its radio division
to Reliance Broadcast Network Limited. As per the terms of FCCB‟s issued, the conversion price of the
bonds is subject to adjustment and the Company was awaiting a confirmation from the bondholders till the
date of redemption. Unless previously redeemed, converted or purchased and cancelled, the bonds will
mature on January 26, 2011 at 121.679 per cent of the principal amount.
During the financial period ended March 31, 2008, the Company classified the liability towards FCCB‟s as
non–monetary liability inter-alia on the basis of the trend of earnings, movement of the Company's share
prices and conversion option exercised by the FCCB holders. On January 25, 2011, the entire FCCB‟S
outstanding as at March 31, 2010, aggregating to Euro 206.50 lakhs have been redeemed at ` 15,814.20
lakhs (including premium ` 3,085.40 lakhs). Consequently on redemption, foreign exchange loss
aggregating to ` 1,489.60 lakhs has been accounted.
6. Movement of goodwill
Particulars Period 2011
(` in lakhs)
Opening balance of goodwill 8,728.62
Goodwill for Subsidiaries acquired in the current year -
Goodwill for additional shares in Subsidiaries acquired in the current year (net) 90.80
8,819.42
7. The Parent Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess
of 20%. This investment was made by the Parent Company with the intention of investment in the
movie "Sultan: The warrior". However, during Period 2009, the Company has issued a letter of
termination demanded refund for the moneys paid by the Company and filed a recovery suit against
Orcher Studios, as per a shareholders‟ agreement signed by the Company which has been agreed to by
Orcher Studios. Since, the Company has intention of selling the shares; the Company has decided not
to consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23 'Accounting for
Associates in Consolidated Financial Statements. The outstanding balance of Sultan Production Private
Limited was ` 1,158.80 lakhs as at March 31, 2010, of which the Company has considered ` 120.00
lakhs as doubtful in Period 2010 and provided for the same.
During Period 2011 Company have received all the money receivable as per the shareholders
agreement and sold the shares
F-48
8. During Period 2011, the Company has sold assets of ` 10,417.30 lakhs for `13,997.20 lakhs pertaining
to the theatrical exhibition segment and leased them back subsequently. The profit on sale of these
assets has been disclosed under the Annexure of other income.
9. For Period 2011, subsidiaries in USA and Nepal have been considered as non-integral and subsidiaries
in UK, Malaysia, Mauritius and Netherlands have been considered as integral to the operations of the
Parent Company in India.
10. Interest and finance (net) charge includes loss on derivative contract (net) ` 2,166.90 lakhs.
III. Period 2010
1. Lease disclosure under AS 19 – „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars Period 2010
(` in lakhs)
For the Parent Company
Amounts due within one year from the balance sheet date 8,089.60
Amounts due in the period between one year and five years 33,154.40
Amount due after five years 71,712.40
112,956.40
For Subsidiaries
Amounts due within one year from the balance sheet date 2,453.90
Amounts due in the period between one year and five years 7,167.50
Amounts due after five years 10,170.30
19,791.70
For Joint ventures (Group's share)
Amounts due within one year from the balance sheet date 193.00
Amounts due in the period between one year and five years 369.90
562.90
Amount payable within lock-in-period is ` 74,381.30 lakhs.
Amount debited to profit and loss account for lease rental is ` 12,366.10 lakhs excluding amounts
capitalised ` 1,344.20 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Group has assigned the derivative contracts pertaining to Options for FCCB and interest rate swap
for long term loans to a Company (Assignee), who has advised the Group regarding entering into these
F-49
contracts. The Assignee had advised the Group with regards to entering into these derivative contracts
and has indemnified the Group with regards to any mark to market losses that the Group will have to
incur on termination of these contracts. Consequently, the total mark to market loss of ` 2,750.40 lakhs
has not been recognised by the Group in its profit and loss account. For the same reason, the Group has
also not recognised a liability for these MTM losses and amounts receivable from the Assignee
Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
March 31, 2010
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divyashakti Marketing Private Limited India 50%
Details of Joint ventures
Particulars
Period 2010
(` in lakhs)
I Assets
1. Fixed assets net block (including Capital work-in-progress) 871.00
2. Investments
-
3. Current assets, loans and advances
a) Inventories
11.40
b) Sundry debtors
70.50
c) Cash and bank balances
77.80
d) Interest accrued but not due
1.00
e) Loans and advances
277.80
II Liabilities
1. Shareholders' fund
491.30
2. Advance towards share application money 125.00
3. Unsecured loans
456.80
4. Deferred tax liability (net) 39.50
5. Current liabilities and provisions
a) Liabilities
153.90
b) Provisions
43.00
III Income
1. Income from theatrical exhibition (net of duties and taxes) 1,027.30
2. Other income
36.00
IV Expenses
1. Direct operational expenses
539.70
F-50
Particulars
Period 2010
(` in lakhs)
2. Personnel costs 53.60
3. Other operating and general administrative expenses
348.60
4. Depreciation
111.80
5. Interest
44.40
Loss before tax
(34.80)
Provision for tax (including deferred tax)
(47.50)
Profit after tax
12.70
V. Other matters
1. Contingent liabilities
948.20
2. Capital commitments
Nil
Movement of the aggregate shareholders funds of the joint ventures:
At the beginning of the period
478.60
Add: Share of profits for the period
12.70
At the end of the period
491.30
4. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Particulars Currency Period 2010
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 29.00 1,305.90
GBP 1.60 108.60
EURO 0.40 24.20
NPR 0.20 0.10
Sundry creditors USD 59.60 2,683.80
GBP 16.70 1,133.40
EURO 1.60 96.90
MYR 107.60 1,484.30
NPR 113.60 72.20
MUR 1.20 1.80
Loans and advances USD 14.20 639.40
GBP 6.20 420.80
EURO 0.10 6.10
MYR 31.40 433.20
NPR 296.60 188.40
F-51
Particulars Currency Period 2010
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
MUR 174.30 265.00
Loans taken USD 101.90 4,588.60
MYR 53.20 733.90
NPR 443.30 281.60
Advance from customer USD 3.30 148.60
GBP 0.50 33.90
Cash and bank balances USD 54.70 2,463.10
MYR 28.00 386.20
NPR 1.50 1.00
GBP 1.10 74.70
EURO 0.10 6.10
MUR
Buyers credit USD 46.10 2,075.90
GBP 1.20 78.00
EURO 8.20 496.70
Foreign currency
convertible bonds
(FCCB) (refer note (c)
of B of Annexure IV)
EURO 206.50 12,511.90
Provision for premium
on redemption on
FCCB
EURO 44.80 2,712.40
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency
Convertible Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs.
The Bonds are convertible at any time on or after March 7, 2006 and up to the close of the business on
January 19, 2011 by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of
the Company with full voting rights with par value of ` 5 each („Shares‟) at an initial conversion price
(as defined in Terms and Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange
on conversion of ` 54.26=EUR 1.00. Of the above bondholders holding bonds of value Euro 633.50
lakhs opted for conversion in Period 2008. The balance bond values aggregating to EURO 206.50
lakhs are outstanding as on the balance sheet date. During Period 2009, the Company demerged its
radio division to Reliance Broadcast Network Limited (refer note 1 of IV of E of Annexure IV). As per
F-52
the terms of bond issue, the conversion price of the bonds is subject to adjustment, after agreement
with the bondholders. Pending finalisation of agreement, the revised conversion price is not yet
decided. Consequently the equity shares issuable on conversion of FCCB 2,061,884 have been
computed based on initial conversion price. The Bonds are listed on the Singapore Exchange Securities
Trading Limited („SGX ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions.
Unless previously redeemed, converted or purchased and cancelled, the bonds will mature on January
26, 2011 at 121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2010 is as follows:
Period 2010
(` in lakhs)
Opening balance
3,084.79
Adj: foreign exchange fluctuation
(372.50)
Closing balance
2,712.29
During Period 2008, the Company classified the liability towards FCCB as non–monetary liability
inter-alia on the basis of the trend of earnings, movement of the Company's share prices and
conversion option exercised by the FCCB holders. The Company continues to classify the liability
towards FCCB as a non–monetary liability as in its view the current fall in the market price of the
Company‟s share price and non-conversion by bond holders is a temporary aberration. Further,
pursuant to scheme of demerger of the radio division, the conversion price is subject to adjustment,
after agreement with bond holders. The Company estimates that there will be significant adjustments
to conversion price considering the value of Radio division which has demerged. Consequently, the
foreign exchange fluctuation (gain) / loss for the year ended March 31, 2010 aggregating to `
(1,718.10) lakhs has not been recognised by management. Cumulative loss not recognised due to
classification of FCCB as a non-monetary liability is ` 1,272.20 lakhs in respect of outstanding
FCCB's. Unrecognised losses on FCCB's which were converted into equity shares in earlier periods is
` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV)
6. The Parent Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess
of 20%. This investment was made by the Company with the intention of investment in the movie
"Sultan: The warrior". However, during Period 2010, the Company has issued a letter of termination
demanded refund for the moneys paid by the Parent Company and filed a recovery suit against Orcher
Studios, as per a shareholders agreement signed by the Company which has been agreed to by Orcher
Studios.
Since, the Parent Company has intention of selling the shares, the Company has decided not to
consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23 'Accounting for
Associates in Consolidated Financials Statements.
The outstanding balance of Sultan Production Private Limited is ` 1,158.80 lakhs of which the
Company has considered ` 120.00 lakhs as doubtful in Period 2010 and provided for the same.
F-53
7. Movement of goodwill
Particulars Period 2010
(` in lakhs)
Opening balance of goodwill 4,202.56
Goodwill for Subsidiaries acquired in the period 1,944.36
Goodwill for additional shares in Subsidiaries acquired in the period (net) 2,581.70
Total 8,728.62
8. For Period 2010, subsidiaries in USA and Nepal have been considered as non-integral and subsidiaries
in UK, Malaysia, Mauritius and Netherlands have been considered as integral to the operations of the
Parent Company in India.
9. Interest and finance charges (net) include loss on derivative transactions (net) of ` 3,539.20 lakhs.
IV. Period 2009
1. Demerger of the Radio Business of the Company to Reliance Broadcast Network Limited
The Board of the Company in their meeting held on October 25, 2008 approved a Scheme of Arrangement
(„the Radio Scheme‟) between Reliance Broadcast Network Limited („RBNL‟), a wholly owned subsidiary
and the Company for the de-merger of the Radio business of the Company into RBNL.
The shareholders of the Company accorded their approval in a court convened meeting of members of the
Company held on January 22, 2009. The Radio Scheme was approved by the Hon‟ble High Court of
Judicature at Bombay vide its order dated April 4, 2009 and filed with the Registrar of Companies („ROC‟)
on June 30, 2009, as required under Section 391(3) of the Act after obtaining approval from the Ministry of
Information and Broadcasting („MIB‟) for vesting of radio licenses held by the Company in the name of
RBNL.
As per the Radio Scheme, the Radio business of the Company stands transferred to RBNL with effect from
April 1, 2008, the Appointed Date and has been given effect to on June 30, 2009, being the Effective Date
and the accounting treatment prescribed by the Radio Scheme has been given effect to in the financial
statements for the year ended March 31, 2009.
All the assets of and liabilities, directly allocable and as mutually determined by the Board of Directors of
RBNL and the Company, of the Radio business as at April 1, 2008 have been transferred at their respective
book values. Further, general borrowings of the Company as on April 1, 2008 have been allocated between
the Company and RBNL on the basis of ratio of total assets of the Company immediately before giving
effect of the Radio Scheme. In consideration of the demerger, RBNL will allot equity shares of ` 5 each in
the ratio of 1:1 and upon issue of shares as above the Company‟s investment in shares of RBNL will stand
cancelled.
As per the provisions of the Radio Scheme, excess balances of assets transferred over liabilities and the
cost of Investments in RBNL cancelled has been debited to Securities premium account as follows:
Amount
(` in lakhs)
Assets of Radio Business as of April 1, 2008 transferred as per the provisions of the Radio
Scheme 44,929.50
Liabilities of Radio Business as of April 1, 2008 transferred as per the provisions of the Radio
Scheme (6,831.50)
F-54
Amount
(` in lakhs)
General borrowings of the Company as of April 1, 2008 allocated between RBNL (Radio
Business) and the Company as per the provisions of the Radio Scheme (22,400.00)
Excess of net assets transferred to RBNL (Radio Business) 15,698.00
Cancellation of investment in RBNL 1,010.00
Total amount debited to Securities premium account as per the Provisions of the Radio
Scheme 16,708.00
The radio business has been held / carried on in trust for the period April 1, 2008 till the Effective Date by
the Company. Accordingly, the Company has charged interest, at an agreed rate on the amount receivable
as at the appointed date and subsequent funding till the effective date. The total receivable ` 26,095.00
lakhs (includes interest ` 2,584.90 lakhs) has been disclosed as a recoverable from RBNL.
However, for Period 2009 financial statements, pending allotment of shares by RBNL, the investment has
been cancelled to give effect to the substance of the Radio Scheme as approved by the Hon‟ble High Court
of Judicature at Bombay and RBNL ceases to be a subsidiary for Period 2009 financial statements.
2. Scheme for merger of wholly owned subsidiaries with the Company
The Board of the Company in their meeting held on January 30, 2009 approved the Scheme of
Amalgamation („Amalgamation Scheme‟) of the Company („Transferee‟) with its wholly owned
subsidiaries Adlabs Multiplexes and Theatres Limited („AMTL‟), Adlabs Multiplex Limited („AML‟),
Mahimna Entertainment Private Limited („MEPL‟) and Rave Entertainment Private Limited („REPL‟)
(collectively referred to as the Transferor Companies). The Amalgamation Scheme was approved by the
Hon‟ble High Court of Judicature at Bombay vide its order dated May 8, 2009 and filed with the Registrar
of Companies („ROC‟) on May 29, 2009, as required under Section 391(3) of the Act.
AMTL, AML and REPL are engaged in the exhibition business and has been included in the exhibition
segment. MEPL has been included in the unallocated corporate segment.
As per the Amalgamation Scheme, AMTL, AML, MEPL and REPL amalgamated with the Company with
effect from April 1, 2008, the Appointed Date and has been given effect to on May 29, 2009, being the
Effective Date and the accounting treatment prescribed by the Amalgamation Scheme has been given effect
to in the financial statements for the Period 2009.
In accordance with the requirements of the Amalgamation Scheme, the credit aggregating ` 5,826.20 lakhs
to Capital reserve has been arrived at as follows:
All assets and liabilities of the transferor companies as at April 1, 2008 which have been identified by
the Board of Directors have been recorded at their respective fair values (as determined based on
valuation reports from government approved valuer / management estimates) as on March 31, 2009.
Investments in the equity shares of the transferor companies as appearing in the books of the
Transferee Company as at March 31, 2009 have been cancelled. The excess of net assets of the
transferor companies taken over at fair value (as determined on March 31, 2009) over the cost of
investment in these companies, aggregating ` 3,605.80 lakhs has been credited to Capital reserve.
The Company has recorded an increase in the value of its assets based on revaluation of certain assets
of the Company pertaining to the Exhibition and Film Services business. The total increase in value of
assets of the Company is ` 17,890.10 lakhs, based on revaluation reports obtained from government
approved external valuers. The Company has also reduced the value of its assets by ` 15,669.70 lakhs
F-55
(Fixed assets and intangible rights ` 3,989.50 lakhs, Debtors ` 2,050.70 lakhs, Loans and advances
including capital advances ` 6,188.50 lakhs and Investments ` 3,441.00 lakhs). The net increase in the
value of assets of the Company ` 2,220.40 lakhs has been credited to Capital reserve pursuant to the
provisions of the Scheme.
The authorised share capital of the transferor Companies was considered as authorised share capital of
the transferee Company. Hence, the authorised share capital of the Company has been increased by `
1,602.90 lakhs divided into 32,058,000 shares of ` 5 each.
The above mentioned accounting treatment is in accordance with the Amalgamation Scheme, had the
Company followed accounting treatment prescribed by AS – 14 “Accounting for Amalgamations” / Indian
GAAP:
The excess of investments over net assets acquired for the Company amounting to ` 1,939.10 lakhs
would have been transferred to Goodwill and would have been amortised over 5 years.
The appreciation in the value of the Company‟s assets aggregating ` 17,890.10 lakhs would have been
credited to the Revaluation reserve instead of being credited to the capital reserve.
The diminution in the value of the Company‟s assets aggregating ` 15,669.70 lakhs would have been
debited to the profit and loss account instead of capital reserve. Accordingly, had the Amalgamation
Schemes as referred above been accounted for as per the requirements of AS – 14 “Accounting for
Amalgamations” / Indian GAAP, the loss for the year would be higher by ` 16,057.60 lakhs, capital
reserve would have been lower ` 281.20 lakhs, revaluation reserve would have been higher by `
17,890.10 lakhs and balance of Goodwill would have been ` 1,551.30 lakhs.
3. Lease disclosure under AS 19 - „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Period 2009
(` in lakhs)
For the Parent Company
Amounts due within one year from the balance sheet date 6,724.30
Amounts due in the period between one year and five years 27,988.70
Amounts due after five years 71,374.40
Total 106,087.40
For Subsidiaries
Amounts due within one year from the balance sheet date 3,319.50
Amounts due in the period between one year and five years 8,465.20
Amounts due after five years 7,942.50
Total 19,727.20
For Joint venture (Group‟s share)
Amounts due within one year from the balance sheet date 2,046.70
Total 2,046.70
F-56
Amount payable within lock-in-period is ` 39,398.00 lakhs.
Amount debited to profit and loss account for lease rental is ` 9,672.10 lakhs excluding amount capitalised
` 1,244.10 lakhs.
4. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contracts pertaining to Options for FCCB and Interest rate swap
for long term loans to a Company(„Assignee‟), who has advised the Company regarding entering into these
contracts. The Assignee had advised the Company with regards to entering into these derivative contracts
and has indemnified the Company with regards to any mark to market losses that the Company will have to
incur on termination of these contracts. Consequently, the total mark to market loss of `14,037.00 lakhs
have not been recognised by the Company in its profit and loss account.
For the same reason, the Company has also not recognised a liability for these MTM losses and amounts
receivable from the Assignee Company.
5. Interest in joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company Country of
Incorporation
% of ownership
interest as at March
31, 2009
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divyashakti Marketing Private Limited India 50%
Details of Joint ventures
Period 2009
(` in lakhs)
I Assets
1. Fixed assets (including Capital work-in-progress) 964.20
2. Current assets, loans and advances
a) Inventories 11.20
b) Sundry debtors 53.70
c) Cash and bank balances 82.00
d) Interest accrued but not due 0.60
e) Loans and advances 115.00
II Liabilities
1. Shareholders' fund 478.60
2. Unsecured loans 506.80
3. Deferred tax liability (net) 55.70
F-57
Period 2009
(` in lakhs)
4. Current liabilities and provisions
a) Liabilities 159.30
b) Provisions 26.30
III Income
1. Sales (net of duties and taxes) 1,186.70
2. Other income 92.00
IV Expenses
1. Operating expenses 956.80
2. Depreciation 109.70
3. Interest -
Profit before tax 212.20
Provision for tax (including deferred tax) 51.50
Profit after tax 160.70
V. Other matters
1. Contingent liabilities 1,016.10
2. Capital commitments Nil
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 404.90
Add: Share of profits for the period 160.70
Less: Dividend declared during the period (87.00)
At the end of the period 478.60
6. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Particulars
Currency Period 2009
Foreign Currency
Amount (lakhs)
Amount (` in lakhs)
Sundry debtors USD 34.60 1,805.20
GBP 0.50 37.10
EURO 0.20 13.80
Sundry creditors USD 45.00 2,347.80
GBP 2.30 170.60
EURO 0.10 6.90
MUR 133.60 216.80
MYR 0.60 8.60
F-58
Particulars
Currency Period 2009
Foreign Currency
Amount (lakhs)
Amount (` in lakhs)
NPR 2.80 1.80
Loans and advances USD 37.80 1,972.20
GBP 0.50 37.10
EURO 0.60 41.30
MYR 19.70 282.00
NPR 41.30 26.60
MUR 282.80 458.90
Cash and bank balances USD 16.70 871.30
MYR 68.70 983.30
NPR 54.70 35.30
GBP 1.10 81.60
EURO 0.40 27.60
Buyers credit USD 5.30 276.60
GBP 1.20 85.30
EURO 8.20 564.90
Unsecured loans USD 156.40 8160.10
Foreign Currency Convertible bonds
(„FCCB‟)
EURO 206.50 14,230.00
Provision for premium on redemption of
FCCB
EURO 44.80 3,084.80
7. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued Zero Coupon Foreign Currency Convertible Bonds
(„Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after March
7, 2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds („the
Bondholders‟) into newly issued equity shares of the Company with full voting rights with par value of ` 5
each („Shares‟) at an initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42
per share with a fixed rate of exchange on conversion of ` 54.26 = EUR 1.00. Of the above bondholders
holding bonds of value Euro 633.50 lakhs opted for conversion in the Period 2008. The balance
bondholders holding bonds value aggregating to Euro 206.50 lakhs have not opted for conversion and
outstanding as on the balance sheet date. The conversion price is subject to adjustment in certain
circumstances, such as demerger of divisions, based on the agreement with bondholders and the Company.
Pending finalisation of agreement, the revised conversion price is not yet decided. Consequently the equity
shares issuable on conversion of FCCB have been computed based on initial conversion price. The Bonds
are listed on the Singapore Exchange Securities Trading Limited („SGX-ST‟).
F-59
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions. Unless
previously redeemed, converted or purchased and cancelled, the bonds will mature on January 26, 2011 at
121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2009 is as follows:
Particulars Period 2009
(` in lakhs)
Opening balance 2,839.89
Add: foreign exchange fluctuation 244.90
Closing balance 3,084.79
During Period 2008, the Company re-classified the liability towards Foreign Currency Convertible Bonds
('FCCB') as non–monetary liability inter-alia on the basis of the trend of earnings, movement of the
Company's share prices and conversion option exercised by the FCCB holders. The Company continues to
classify the liability towards FCCB as a non–monetary liability as in its view the current fall in the market
price of the Company‟s share price and non-conversion by bond holders is a temporary aberration.
Consequently, the foreign exchange fluctuation loss for the Period 2009 aggregating to ` 1,130.10 lakhs
has not been recognised by the management. Cumulative loss not recognised due to classification of FCCB
as a non-monetary liability is ` 2,990.40 lakhs in respect of outstanding FCCB's. Unrecognised losses on
FCCB's which were converted into equity shares in earlier periods is ` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV)
8. Impairment Disclosure
During Period 2009, the Company has impaired certain fixed assets pertaining to the:- Exhibition Division
on the basis of determination of value in use of each property, which the Company considers as the relevant
Cash Generating Unit („CGU‟) for the purpose of impairment testing. The Company has considered a
discount rate of 11.68%. The amount of impairment loss of ` 551.70 lakhs has been debited to the Capital
reserve pursuant to Scheme of Amalgamation.
(Refer note 2 of IV of E of Annexure IV)
9. Movement of Goodwill
Particulars Period 2009
(` in lakhs)
Opening balance of goodwill 2,746.76
Goodwill, reversed on Subsidiaries which have been amalgamated in the Period 2009 (1,605.50)
Goodwill for Malaysia Subsidiary acquired in the Period 2009 3,060.70
Goodwill for additional shares in Subsidiaries acquired in the Period 2009 0.60
Total 4,202.56
F-60
10. For Period 2009, subsidiaries in USA have been considered as non-integral and subsidiaries in UK,
Malaysia, Mauritius, Nepal and Netherlands have been considered as integral to the operations of the
Parent Company in India.
11. Interest and finance (net) charge includes loss on derivative contract (net) ` 4,864.90 lakhs.
V. Period 2008
1. Modified Composite Scheme of amalgamation and arrangement
The Board of the Company at their meeting held April 23, 2006 approved the Composite Scheme of
amalgamation and arrangement between the Company, Entertainment One India Limited („E-ONE‟),
Adlabs Multiplex and Theatres Limited („AMTL‟) and Reliance Broadcast Network Limited („RBNL‟).
The shareholders of the Company accorded their approval to the Composite Scheme at the Annual General
Meeting on July 29, 2006. The Composite Scheme was approved by the Hon'ble High Court of Judicature
at Bombay vide its order dated September 15, 2006. The Composite Scheme inter-alia provided for the
following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
the demerger of the radio business of the Company to RBNL effective March 31, 2006.
The Company had made an application to the Ministry of Information and Broadcasting for vesting of radio
licenses held by it in the name of RBNL. Pending the said approval, the Composite Scheme was not filed
with the Registrar of Companies ('ROC') as required under Section 391(3) of the Companies Act, 1956 ('the
Act'). However, for the purpose of the fifteen month period ended June 30, 2007 financial statements,
pending completion of licensing and other procedural formalities, the Composite Scheme was given effect
to in view of the Court approval and to give effect to the substance of the Composite Scheme as approved
by the Hon'ble High Court of Judicature at Bombay
In accordance with the requirements of the Composite Scheme, the merger of E-ONE as well as the digital
business of AMTL and the demerger of the radio business of the Company was accounted for as follows:
All assets and liabilities of E-ONE as at April 1, 2005 were recorded by the Company at their fair
values. Since E-ONE was a wholly owned subsidiary of the Company, the investment by the
Company in the shares of E-ONE was cancelled against the assets and liabilities acquired on
amalgamation. The excess of net assets taken (at fair value) over the cost of investment in EONE
amounting to ` 272.58 lakhs was credited to 'Amounts pending transfer to the Securities premium
account and / or General reserve account as per the Composite Scheme of amalgamation and
arrangement'.
All assets and liabilities of the digital business of AMTL as at April 1, 2005 were recorded by the
Company at their book values. Since AMTL was a wholly owned subsidiary of the Company, no
consideration was paid against the assets and liabilities acquired. The excess of liabilities over the
assets taken over (at book value) amounting to ` 44.69 lakhs was debited to 'Amounts pending
transfer to the Securities premium account and / or General reserve account as per the Composite
Scheme of amalgamation and arrangement'.
F-61
All assets and liabilities of the radio business of the Company as at March 31, 2006 were
transferred at their respective book values. The aggregate value of net assets transferred pursuant
to the Composite Scheme in excess of ` 10,000.00 lakhs (which was recorded as receivable from
RBNL) was recorded in 'Amounts pending transfer to the Securities premium account and/or
General reserve account as per the Composite Scheme of amalgamation and arrangement'
Subsequently during the current period, the Board modified the aforesaid Composite Scheme vide circular
mode pursuant to Section 289 of the Companies Act, 1956 on February 13, 2008. The Modified Composite
Scheme of amalgamation and arrangement (the Modified Scheme) between the Company, E-ONE and
AMTL was approved by the Hon'ble High Court of Judicature at Bombay vide its order dated March 7,
2008 and was filed with the ROC as required under Section 391(3) of the Companies Act, 1956 ('the Act')
on March 31, 2008.The Modified Scheme inter-alia provides for the following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
adjusting the net results of the transactions related to radio business from March 31, 2006 till the
effective date in the General reserve account of the Company.
As the Composite Scheme was primarily modified in relation to the radio business, in respect of
amalgamation of E-ONE and merger of digital business of AMTL, these were already given effect to in the
financial statements of the fifteen month period ended June 30, 2007. Accordingly, no further adjustments
are made in the current period's financial statements, except that the amounts which were not credited /
debited to 'Securities premium' / 'General reserve' pending filing the Composite Scheme with ROC have
now been debited / credited to Securities premium / General reserve as applicable on the filing of the
Modified Scheme with the ROC.
During the Period upto March 31, 2008, E-ONE and AMTL carried on their existing business in trust for
and on behalf of the Company. All vouchers, deeds, licenses, agreements, loan documents, etc are in the
name of E-ONE and AMTL. The tile deeds, licenses, agreements, loan documents, etc are being transferred
in the name of the Company.
As regards the Radio business, the provision relating to demerger of the radio business of the Company to
RBNL effective March 31, 2006 as provided in the Composite Scheme and given effect to in the fifteen
month period ended June 30, 2007 financial statements has been deleted in the Modified Scheme.
Accordingly, all the adjustments effected in the fifteen month ended June 30, 2007 financial statements in
this regard have been reversed during the current period. Further, in accordance with the Modified Scheme,
the net results of the transactions related to radio business for the period from March 31, 2006 till the
effective date i.e. March 31, 2008 have been debited to General reserve account of the Company.
The net results of the transactions related to radio business for the period from March 31, 2006 up to March
31, 2008 are summarised hereunder:
Particulars Period 2008
(` in lakhs)
Fifteen month
period ended
June 30, 2007
(` in lakhs)
Income 11,160.90 3,320.30
F-62
Particulars Period 2008
(` in lakhs)
Fifteen month
period ended
June 30, 2007
(` in lakhs)
Expenditure
Direct costs 5,062.10 2,024.60
Personnel costs 3,477.60 2,528.10
Other operating and general administrative expenses * 5,584.10 4,547.60
Interest 1,346.30 2,119.90
Depreciation / amortisation 2,396.60 1,474.80
Loss before taxation (6,705.80) (9,374.70)
Tax Expenses - fringe benefit tax 114.90 75.50
Loss after tax (A) (6,820.70) (B) (9,450.20)
Total (A + B) (16,270.90)
Tax effect of the above 1,907.60
Balance transferred to General reserve account 14,363.30
* includes ` 785.80 lakhs (Fifteen month ended June 30, 2007: ` 2,086.70 lakhs, since reversed) being
interest etc. allocated / charged in the fifteen month ended June 30, 2007 by Company to the Radio
Business on net funds utilised in carrying on the radio business.
For deviation to the accounting treatment recommended in the standard refer note For deviation to the
accounting treatment recommended in the standard refer note 3 of V of E of Annexure IV.
2. Acquisition of Rave Entertainment Private Limited ('REPL')
On May 31, 2007, the Company entered into a Share Purchase Agreement ('SPA') with the shareholders of
Rave Entertainment Private Limited ('REPL'), a company engaged inter-alia in the business of owning and
operating multiplexes, for acquisition of 100% stake in that company. One of the conditions precedent to
the SPA was the approval by the Hon'ble High Court of Judicature at Allahabad of the Scheme of demerger
filed by REPL for demerger of Kanpur properties. Pending approval of the Scheme of demerger by the said
Court, the shares of REPL were held in Escrow and the consideration of ` 500 lakhs was disclosed under
loans and advances in the last period's financial statements. On December 12, 2007, the Hon'ble High Court
of Judicature at Allahabad approved the said Scheme of demerger. Consequently, REPL is now a wholly
owned subsidiary of the Company and the amounts placed in Escrow and those disclosed under loans and
advances have been adjusted as per the terms of the SPA.
3. Acquisition of Katch 22 Entertainment Private Limited ('Katch 22')
On April 23, 2007, the Company acquired 100% stake in Katch 22, a company engaged in the production
and distribution of films. Subsequently, pursuant to the Board of Directors' approval vide resolution dated
April 26, 2007, the Company had filed the Scheme of amalgamation of Katch 22 ('the Katch 22 Scheme')
with the Hon'ble High Court of Judicature at Bombay for the merger of Katch 22 with the Company
effective April 1, 2006. The Katch 22 Scheme was approved by the Hon'ble High Court of Judicature at
Bombay vide its order dated September 14, 2007 and filed with the ROC on October 9, 2007. The Katch 22
Scheme inter-alia provides for the amalgamation of Katch 22 Entertainment Private Limited with the
Company effective April 1, 2006.
F-63
In accordance with the requirements of the said Katch 22 Scheme, the merger of Katch 22 with the
Company has been accounted for as follows:
As per the Katch 22 Scheme, Katch 22 amalgamates with the Company retrospectively from April
1, 2006, the Appointed Date. All assets and liabilities of Katch 22 as at April 1, 2006 have been
recorded by the Company at their fair values. Since Katch 22 was a wholly owned subsidiary of
the Company, the investment by the Company in the shares of Katch 22 has been cancelled
against the assets and liabilities acquired on amalgamation. The excess of net assets taken over at
fair value (as determined on the effective date i.e. October 9, 2007) over the cost of investment in
Katch 22 amounting to ` 201.80 lakhs has been credited to General reserve account.
The Company has also recorded the reduction of ` 2,000 lakhs in the value of its assets (debtors,
unamortised rights and loans and advances) by debit to 'General reeserve account' as per the
provisions of the Katch 22 Scheme.
The net results of the transactions relating to Katch from April 1, 2006 upto the Effective Date are as
follows:
Particulars For the period
from July 1, 2007
to October 8, 2007
(` in lakhs)
Fifteen month
period ended
June 30, 2007
(` in lakhs)
Sales and Service (net) - 701.90
Other Income 23.30 -
Total Revenue 23.30 701.90
Direct costs - 1,691.30
Other operating and general administrative expenses 0.20 0.10
Interest - 131.60
Profit Before taxation 23.10 (1,121.10)
Tax expenses - -
Profit after tax 23.10 (1,121.10)
Impact of Schemes referred to in notes 1 of V of E of Annexure IV and 3 of V of E of Annexure IV:
Had the Company followed the accounting treatment prescribed by AS-14 / generally accepted accounting
principles in India:
` 201.80 lakhs arising from the merger of Katch 22 with the Company and credited to the General
reserve account would have been credited to Capital reserve account;
Reduction of ` 2,000.00 lakhs in value of the Company's assets would have been debited to the
Profit and loss account instead of General reserve account;
` 2,086.70 lakhs being interest on monies advances by the Company to the Radio Business would
have been reversed in the profit and loss account as against the reversal in the General reserve; and
the net results (loss) of the transactions related to Radio Business from March 31, 2006 upto the
Effective date i.e. March 31, 2008 aggregating to ` 14,363.30 lakhs (net of tax benefits) arising
F-64
from modification in the Scheme of demerger of Radio Business and debited to the General
reserve account would have been debited to profit and loss account.
Accordingly, had the Modified Scheme been accounted for in compliance with the requirements of AS 14 /
generally accepted accounting principles in India, the profit for the period before tax would have been
lower by ` 18,450.00 lakhs, General reserve account would have been higher by ` 18,248.20 lakhs and
Capital reserve account would have been stated at ` 201.80 lakhs.
4. Lease disclosure under AS 19 - „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Period 2008
(` in lakhs)
For the Parent Company
Amounts due within one year from the balance sheet date 4,607.80
Amounts due in the period between one year and five years 18,978.80
Amounts due after five years 53,463.80
Total 77,050.40
For Subsidiaries
Amounts due within one year from the balance sheet date 465.40
Amounts due in the period between one year and five years 1,936.40
Total 2,401.80
For Joint venture (Group‟s share)
Amounts due within one year from the balance sheet date 114.00
Amounts due in the period between one year and five years 104.50
Total 218.50
Amount payable within lock-in-period is ` 38,309.40 lakhs.
Amount debited to profit and loss account for lease rental is ` 3,287.20 lakhs.
5. Interests in Joint Venture
The Group's interests in jointly controlled entities (incorporated Joint ventures) are:
F-65
Name of the Company Country of
incorporation
% of ownership
interest as at
March 31, 2008
Swanston Multiplex Cinemas Private Limited India 50.00%
Adlabs Multiplex Limited (Became wholly owned
subsidiary with effect from December 20, 2007)
India -
Cineplex Private Limited India 50.00%
Divyashakti Marketing Private Limited India 50.00%
Details of Joint ventures
Particulars Period 2008
(` in lakhs)
I. Assets
1. Fixed assets (including Capital work-in-progress) 1,063.80
2. Investments 56.40
3. Current assets, loans and advances
a) Inventories 8.50
b) Sundry debtors 88.40
c) Cash and bank balances 69.30
d) Interest accrued but not due 0.50
e) Loans and advances 73.50
II. Liabilities
1. Shareholders' fund 478.90
2 Unsecured loans 634.60
3. Deferred tax liability (net) 54.10
4. Current liabilities and provisions
a) Liabilities 179.60
b) Provisions 13.20
III. Income
1. Sales (net of duties and taxes) 1024.10
2. Other income 102.80
IV. Expenses
1. Operating expenses 911.30
2. Depreciation 102.10
3. Interest 0.60
4. Profit before tax 112.90
5. Prior period adjustments (0.40)
6. Provision for tax (including deferred tax) 30.00
7. Profit after tax 83.30
F-66
Particulars Period 2008
(` in lakhs)
V. Other matters
1. Contingent liabilities 2,032.20
2. Capital commitments -
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 497.10
Add: Share of loss for the period (18.20)
At the end of the period 478.90
6. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Particulars Currency
Period 2008
Foreign Currency
Amount (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 6.00 239.80
EURO 0.10 6.50
GBP 3.70 290.80
Sundry creditors USD 43.80 1,958.00
EURO 0.30 15.40
GBP 8.30 524.40
MUR 0.70 1.10
Unsecured loans USD 35.80 1,433.80
EURO 13.20 839.30
GBP 0.10 9.00
Zero Coupon Foreign Currency
Convertible Bonds („FCCB‟) (Refer note
(c) of B of Annexure IV)
EURO 206.50 13,099.90
Provision for premium on redemption of
FCCB
EURO 44.80 2,899.90
7. Foreign Currency Convertible Bonds („FCCB‟)
On 25 January 2006 the Company ('Issuer') issued Zero Coupon Foreign Currency Convertible Bonds
('Bonds' or 'FCCB') aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after 7 March
2006 and upto the close of the business on January 19, 2011 by the holders of the Bonds ('the Bondholders')
into newly issued equity shares of the Company with full voting rights with par value of ` 5 each ('Shares')
F-67
at an initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42 per share with
a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. The conversion price is subject to
adjustment in certain circumstances. The Bonds are listed on the Singapore Exchange Securities Trading
Limited ('SGX-ST').
The Bonds may be redeemed, in whole but not in part, at the option of the Issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions. Unless
previously redeemed, converted or purchased and cancelled, the bonds will mature on January 26, 2011 at
121.679 per cent of the principal amount.
During the Period 2008, bond holders holding bonds aggregating Euro 633.50 lakhs have opted to convert
the bonds to equity shares. Accordingly shares aggregating to 6,325,420 have been issued to them at a price
of ` 543.42 per share (including securities premium of ` 538.42 per share).
Period 2008
(` in lakhs)
Opening balance 10,006.59
Add: Reversal of provision for premium on conversion of FCCB (7,858.20)
Add: foreign exchange fluctuation 691.50
Closing balance 2,839.89
* Premium payable on redemption of FCCB ` 9,880.90 lakhs has been fully provided for and has been
charged to securities premium account. During the period, Bond holders holding bonds aggregating Euro
633.50 lakhs have opted to convert their bonds into equity shares.
During the Period 2008, FCCBs have been reclassified as non-monetary liabilities pursuant to inter-alia the
current trend of earnings and market price of the Company's equity share exceeding the conversion price
stipulated in the offer document (bondholders holding 75.42% of the FCCB have exercised conversion
option to this date). Consequently, the foreign exchange fluctuation loss aggregating to ` 438.10 lakhs
accounted in the fifteen month period ended June 30, 2007 and year ended 31 March 2006 has been
reversed during the period in the Profit and Loss account and foreign exchange fluctuation loss of `
3,621.80 lakhs for the financial period has not been recognised in the profit and loss account.
(Refer note (c) of B of Annexure IV)
8. For Period 2008, subsidiaries in USA, UK, Mauritius, and Netherlands have been considered as
integral to the operations of the Parent Company in India.
F-68
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March 31,
2010
March
31, 2009
March 31,
2008
Authorised
Equity shares of ` 5/-each 24,000.00 5,000.00 5,000.00 4,602.90 3,000.00
Preference shares of `5/-each 1,000.00 - - - -
25,000.00 5,000.00 5,000.00 4,602.90 3,000.00
Issued, subscribed and paid-up
capital
Equity shares of ` 5/- each, fully paid-
up 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
10 % redeemable non convertible non
cumulative preference shares
(Preference shares) of ` 5/- each, fully
paid-up 147.50 - - - -
2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
(refer notes (a) to (h) below)
(a) Reconciliation of the shares outstanding at the commencement and at the end of the period
Equity shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
At the commencement of the period 461.26 461.26 461.26 461.26 398.00
Share issued during the period - - - - 63.26
At end of the period 461.26 461.26 461.26 461.26 461.26
Preference shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
At the commencement of the period - - - - -
Share issued during the period 29.50 - - - -
At end of the period 29.50 - - - -
(b) Rights, preferences and restriction attached to equity shares
F-69
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March 31,
2010
March
31, 2009
March 31,
2008
The Company has only one class of equity shares having par value of ` 5 per share. Each equity holder is
entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. The
dividend proposed, if any by the Board of the Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to
the number of equity shares held by the shareholders.
(c) Rights, preferences and restriction attached to Preference share
Preference shares shall be redeemed at the end of 20 years from the date of allotment i.e. each Preference
shares shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a. (till
date of redemption ) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend, if any
declared during the tenure. However, the premium on redemption will be paid only to the original subscribers
or to the transferees if the transfers have been previously approved by the Company.
Further early redemption at the option of holder of Preference shares can be done, at issue price plus yield as
mentioned above, at any time after the date of allotment by giving not less than two months advance notice to
the Company. Early redemption at the option of Company at the applicable redemption price can be done, any
time after the date of allotment by giving not less than 30 days notice to the Preference share holder.
(d) Names of shareholders holding more than 5% of equity share in the Company
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
Reliance Land Private Limited 206.00 206.00 206.00 206.00 206.00
Reliance Capital Limited 85.29 81.05 81.05 29.55 -
AAA Entertainment Private Limited - - - 48.00 48.00
% holding
in the class
%
holding in
the class
% holding
in the class
%
holding in
the class
% holding
in the class
Reliance Land Private Limited 44.66% 44.66% 44.66% 44.66% 44.66%
Reliance Capital Limited 18.49% 17.57% 17.57% 6.41% -
AAA Entertainment Private Limited - - - 10.40% 10.40%
(e)
Names of shareholders holding more
than 5% of Preference share in the
Company
No of No of No of No of No of
F-70
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March 31,
2010
March
31, 2009
March 31,
2008
Shares Shares Shares Shares Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
Reliance Infocomm Engineering
Private Limited 12.00 - - - -
Reliance Utility Engineers Private
Limited 17.50 - - - -
% holding
in the class
%
holding in
the class
% holding
in the class
%
holding in
the class
% holding
in the class
Reliance Infocomm Engineering
Private Limited 40.68% N.A. N.A. N.A. N.A.
Reliance Utility Engineers Private
Limited 59.32% N.A. N.A. N.A. N.A.
(f) Pursuant to shareholder approval dated March 30, 2012, the authorised share capital of the Company was
reclassified from 1,000 lakh equity shares of ` 5 each to 800 lakh equity shares of ` 5 each and 200 lakh
preference shares of ` 5 each.
(g) Pursuant to shareholder approval dated July 13, 2012, the authorised share capital of the Company was
increased from ` 5,000 lakhs to ` 25,000 lakhs divided into 4,800 lakh equity shares of ` 5 each and 200 lakh
preference shares of ` 5 each.
(h) During Period 2009, the authorised share capital of the Company has been increased as per the provisions of
Scheme of Amalgamation by ` 1,602.90 divided into 32,058,000 shares of ` 5 each. (refer note 1 of VI of E of
Annexure IV)
(i) During the Period 2008, bond holders holding bonds aggregating EURO 633.50 lakhs have opted to convert
their bonds to equity shares. Accordingly, equity shares aggregating to 63.26 lakhs have been issued to them at
a price of ` 543.42 per share (including securities premium of ` 538.42).
F-71
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
a) Securities premium reserve
At the commencement of the
period 46,862.14 47,235.25 46,862.75 63,815.65 25,824.54
Less : Provision for premium on
redemption of Zero Coupon
Foreign Currency Convertible
Bonds ('FCCB') (Also refer note
(c ) of B of Annexure IV) - (373.11) 372.50 (244.90) (691.50)
Add : On issuance of equity
shares pursuant to conversion of
FCCB‟s - - - - 34,161.66
Add : Premium on issuance of
preference shares 29,352.50 - - - -
Less: Adjustment pursuant to
Katch 22 Scheme (Refer note 3
of V of E of Annexure IV) - - - - (1,287.00)
Add : Reversal of provision for
premium on FCCB converted
during the period (Also refer
note (c ) of B of Annexure IV) - - - - 7,858.20
Less : Adjustment pursuant to
Modified Composite Scheme of
Amalgamation and
Arrangement (Refer note 1 of V
of E of Annexure IV) - - - - (2,050.25)
Less: Adjustment pursuant to
Scheme of Arrangement for
demerger of Radio business
(refer note 1 of IV of E of
Annexure IV) - - - (16,708.00) -
76,214.64 46,862.14 47,235.25 46,862.75 63,815.65
b) General reserve
At the commencement of the
period 790.62 888.42 1,210.22 1,324.82 5,633.54
Add : Transfer from Statement
of profit and loss 151.03 - - - 11,580.20
F-72
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Add : Transfer on account of
Scheme of Amalgamation of
Katch 22 (Refer note 3
of V of E of Annexure IV) - - - - 201.80
Less : Reduction in value of
Companies assets pursuant to
Scheme of Amalgamation of
Katch 22 (Refer note 3 of V of
E Annexure IV) - - - - (2,000.00)
Less : Net result of the
transactions relating to Radio
business adjusted pursuant to
Modified Composite Scheme of
Amalgamation and
Arrangement (Refer note 1 of V
of E of Annexure IV) - - - - (14,363.30)
Less: Transferred to Capital
Redemption reserve (29.70) (97.80) (321.80) (114.60) -
Add : Adjustment pursuant to
Modified Scheme of
Amalgamation
and Arrangement (Refer note1of
V of E of Annexure IV) - - - - 272.58
911.95 790.62 888.42 1,210.22 1,324.82
c) Capital reserve on
consolidation - - - 240.70 -
d) Capital reserve –I At the
commencement and end of the
period 33.88 33.88 33.88 33.88 33.88
e) Capital reserve - II
At the commencement of the
period 5,826.20 5,826.20 5,826.20 - -
Amounts transferred to Capital
reserve as per provisions of the
Scheme of Amalgamation
(Refer note 2 of IV of E of
Annexure IV) - - - 5,826.20 -
5,826.20 5,826.20 5,826.20 5,826.20 -
f) Capital redemption reserve
At the commencement of the
period
534.20 436.40 114.60 - -
F-73
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Add: Transferred from profit
and loss 636.10 - - - -
Add: Transferred from general
reserve 29.70 97.80 321.80 114.60 -
1,200.00 534.20 436.40 114.60 -
g) Foreign Currency Translation
Reserve
At the commencement of the
period (315.16) (428.97) 262.01 - -
Add: Foreign currency
translation gain / (loss) on non-
integral operations (net) 969.48 113.81 (690.98) 262.01 -
654.32 (315.16) (428.97) 262.01 -
h) Amount pending transfer to
the Securities premium
reserve and / or the General
reserve as per the Composite
Scheme of Amalgamation and
Arrangement (Refer note 1 of
V of E of Annexure IV)
i) Pending transfer to Securities
premium reserve
At the commencement of the
period - - - - (10,015.64)
Reversal due to the Modified
Scheme of Amalgamation and
Arrangement - - - - 7,965.39
Transfer to Securities premium
reserve - - - - 2,050.25
- - - - -
ii) Pending transfer to General
reserve
At the commencement of the
period - - - - 272.58
On merger of E-ONE transfer to
General Reserve - - - - (272.58)
Transfer to - - - - -
General reserve
I) (Deficit) / Surplus in
Statement of profit and loss
At the commencement of the
period (53,377.75) (20,506.26) (7,640.42) 302.39 11,340.87
F-74
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
(Loss) / Profit for the period, as
per Statement of profit and loss (91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52
Reduction of Reserves on sale
of subsidiaries and joint
ventures (148.43) - - - -
Appropriations
Transfer to general reserve (151.00) - - - (11,580.20)
Capital redemption reserve (636.10) - - - -
Proposed dividend on
preference shares of a subsidiary (43.90) (46.60) (53.50) (76.00) (84.00)
Proposed dividend on equity
shares of a subsidiary - - - - (1,153.15)
Dividend tax on proposed
dividend on preference shares of
a subsidiary (7.10) (7.90 (9.10) (12.91) (14.28)
Dividend tax on proposed
dividend on equity shares (63.70) - - (41.19) (205.37)
(145,444.60) (53,377.75) (20,506.26) (7,640.42) 302.39
(60,603.61) 354.13 33,484.92 46,909.94 65,476.74
The above statement should be read together with significant accounting policies and notes to summary statements
of the Group (Annexure IV)
F-75
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current assets,
of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Non-current investments
I Investment in Equity
Instruments (Unquoted)
Others (non-trade, unquoted
and at cost)
a Sultan Production Private
Limited (refer note 6 of III of E
Annexure IV) - - 1.00 1.00 1.00
b Manipal Industries Limited - 0.01 0.01 0.01 0.01
c Efficient Management Services
Private Limited - 0.02 0.02 0.02 0.02
- 0.03 1.03 1.03 1.03
II Investment in Partnership
Firm (Unquoted and at cost)
a Gold Adlabs 507.04 540.30 524.50 503.40 529.60
b HPE / Adlabs LP 1,999.30 1,999.30 1,999.30 2,241.00 4,607.75
(2009 and 2010 ` 2,366.80 lakhs
towards recovery of principal
pursuant to a contract and 2010;
` 241.70 lakhs has been repaid
by the partnership firm as
principal)
Less : -Provision for diminution
in value of the long term
investments (1,999.30) (1,999.30) (1,999.30) (2,241.00) -
507.04 540.30 524.50 503.40 5,137.35
III Investment in preference
shares (non-trade, unquoted
and at cost)
Tree of Knowledge DOT Com
Private Limited # - - - 1,200.00 1,200.00
Less : -Provision for diminution
in value of the long term
investments - - - (1,200.00) -
- - - - 1,200.00
F-76
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current assets,
of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
IV Investment in Government
securities (trade, unquoted
and at cost)
Government securities
1 National savings certificates 30.30 34.30 114.40 104.50 100.20
(Pledged with State government
authorities)
2 Rural Electrification
Corporation Bond - - 22.00 22.00 22.00
30.30 34.30 136.40 126.50 122.20
V Investment in mutual fund
(non-trade, unquoted and at
lower of cost and fair value) 16.00 518.36 610.48 530.79 530.79
Total 553.34 1,092.99 1,272.41 1,161.72 6,991.37
Aggregate value of unquoted
investments 2,552.64 3,092.29 3,271.71 4,602.72 6,991.37
Aggregate provision for
diminution in value of
investments 1,999.30 1,999.30 1,999.30 3,441.00 -
B Deferred tax asset
Arising on account of timing
difference in:
Provision for leave encashment
and gratuity 254.80 274.60 130.50 137.10 207.30
Others 3,264.90 39.20 79.30 584.10 186.10
Unabsorbed depreciation
allowance and carried forward
business loss * 1,895.10 4,101.77 2,215.30 1,093.90 1,899.30
5,414.80 4,415.57 2,425.10 1,815.10 2,292.70
Deferred tax liability
Arising on account of timing
difference in:
Depreciation/ amortisation (net) 5,019.30 4,929.36 2,485.89 1,862.99 2,420.33
Others 375.10 - 0.40 - -
5,394.40 4,929.36 2,486.29 1,862.99 2,420.33
Net deferred tax assets /
(liabilities) 20.40 (513.79) (61.19) (47.89) (127.63)
* Restricted to the extent of
F-77
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current assets,
of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
deferred tax liability due to
absence of virtual certainty
The net asset / (liability) has
been shown as the Group does
not have the option to set off the
balances of individual
Companies.
Deferred tax asset 20.40 2.60 2.20 18.70 64.40
Deferred tax liability - 516.39 63.39 66.59 192.03
Net deferred tax asset /
(liability) 20.40 (513.79) (61.19) (47.89) (127.63)
C Long-term loans and advances
- Unsecured, considered good
I Capital advances 905.20 1,712.91 2,868.32 1,931.27 9,613.49
II Security deposits 13,878.10 17,788.75 17,484.12 16,926.55 14,799.22
III Loans to others 271.90 206.20 266.11 320.00 385.30
IV Advance tax, tax deducted at
source, advance fringe benefit
tax (net of provision for tax
Period 2012 - ` 1, 292.40,
Period 2011 - ` 638.30, Period
2010 – ` 1,144.90, Period 2009
- ` 4,006.26, Period 2008 - `
4,818.37) 2,072.00 3,682.12 5,392.14 4,129.28 3,450.82
V Advance towards investment
(Refer Annexure XIII) 5,000.00 5,000.00 - - -
VI Others * 1,515.30 935.00 1,130.95 1,485.00 1,044.52
23,642.50 29,324.98 27,141.64 24,792.10 29,293.35
*Prepaid expenses and
entertainment tax paid under
protest etc.
-Unsecured considered
doubtful
Security deposits 240.50 - - - -
Provision for doubtful advances,
deposits and others (240.50) - - - -
- - - - -
23,642.50 29,324.98 27,141.64 24,792.10 29,293.35
D Other non-current assets
F-78
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current assets,
of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
I Interest accrued but not due 22.20 49.00 52.50 49.10 33.44
II Fixed Deposits with bank 8.40 99.00 - - -
III Gratuity - 9.80 - - -
IV Balance with bank - Margin
money deposit* 31.40 231.50 224.92 10.31 10.31
*Margin money deposits are
under bank lien for guarantees
given by the Company
62.00 389.30 277.42 59.41 43.75
# These shares have been forfeited during Period 2010
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Notes:
1. Amounts due from parties related to the issuer Company, have been disclosed in Annexure XVIII as
part of related party disclosures.
2. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose
in the offer document whether any of the receivable are related to directors or promoters or the issuer
in any way. In absence of clarification on “related to the directors or promoters”, Company has
disclosed amounts due from relatives of directors as defined in Schedule IA of the Companies Act,
1956 and in case of promoters, amount due from “Promoter Group” and “Group Companies” as
defined in SEBI ICDR Regulation. The List of persons / entities classified as “Promoter Group” and
“Group Companies” has been determined by the Group and relied upon by the Auditors.
3. Refer note 2 of IV of E of Annexure IV, note 1 of V of E of Annexure IV and note 3 of V of E of
Annexure IV for advances written off pursuant to Schemes.
F-79
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
A Current investments
I Investment in mutual fund (non-
trade, unquoted and at lower of
cost and fair value)
Investment in mutual funds - 10.44 7,902.30 - 13,556.71
- 10.44 7,902.30 - 13,556.71
Market value of current
investment - 10.44 7,906.70 - 13,556.71
B Inventories
(valued at lower cost and net
realisable value) (refer note 8 of A of
Annexure IV)
I Stores and spares 425.80 482.40 356.50 388.00 57.80
II Chemical stock 36.50 20.70 16.50 33.50 17.20
III Food and beverages 346.10 433.00 371.70 154.80 67.60
IV Negative film rolls 45.50 52.40 54.10 54.60 58.80
V Content not aired 563.80 334.90 60.70 - 515.80
VI Stocks of DVD's - 1.90 47.70 59.60 44.10
1,417.70 1,325.30 907.20 690.50 761.30
C Trade receivables
Unsecured, considered good;
I Debts outstanding for a period
exceeding six months from the date
they are due for payments 13,162.72 16,175.70 13,145.50 14,184.30 1,518.70
Other debts 5,510.32 5,424.90 10,085.10 6,847.40 10,622.80
18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
Unsecured, considered doubtful;
II Debts outstanding for a period
exceeding six months from the date
they are due for payments 2,421.99 724.60 49.60 - 224.10
Other debts 2,386.70 - - 40.60 93.80
4,808.69 724.60 49.60 40.60 317.90
Less: Provision for doubtful debts 4,808.69 724.60 49.60 40.60 317.90
- - - - -
18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
D Cash and bank balances
Cash and cash equivalents
I Balances with banks
- in current accounts 4,755.40 5,003.80 2,809.80 3,235.00 2,364.80
F-80
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
- in fixed deposit account with
original maturity less than three
months 360.30 283.55 1,489.59 228.50 3,372.30
II Cash on hand 583.30 234.40 257.70 196.00 91.60
- Foreign Currency denominated
preloaded cards - - - - 1.70
5,699.00 5,521.75 4,557.09 3,659.50 5,830.40
III Other bank balances
- in dividend account 10.50 12.20 13.80 14.60 8.20
- in escrow account - - - - -
- in fixed deposit account maturing 610.80 697.11 648.49 1,535.61 1,391.90
with in a year
- in margin money deposit
maturing with in a year* 4,878.40 5,541.93 3,051.59 2,672.28 5,145.99
5,499.70 6,251.24 3,713.88 4,222.49 6,546.09
11,198.70 11,772.99 8,270.97 7,881.99 12,376.49
*Margin money deposits are under
bank lien for guarantees given by the
Company
E Short-term loans and advances
- Unsecured, considered good
I Amount due from Reliance
Broadcast Network Limited
pursuant to demerger of Radio
business - 6,095.00 26,095.00 26,095.00 -
II Loans to others 879.60 1,507.90 1,136.69 2,745.40 14,071.10
III Deposits 185.50 1.85 35.48 0.05 0.08
IV Advance tax, tax deducted at source,
advance fringe benefit tax (net of
provision for tax of Period 2012 : `
37.40, 2011 : ` 112.10, 2010: `
419.00 2009: ` 530.96 and 2008: `
295.76) 327.00 688.97 275.08 66.99 27.65
V Advance towards share application
(Refer note 10 of I of E of Annexure
IV) 6,811.20 - - - -
V Others * 4,759.80 4,908.29 9,024.40 5,972.23 10,925.78
12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
F-81
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
- Unsecured, considered
Doubtful
Loans to others 393.50 - - - -
Others* 1,081.50 979.50 120.60 0.60 66.50
Less: Provision for doubtful
advances 1,475.00 979.50 120.60 0.60 66.50
- - - - -
12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
*includes service tax credit input,
value added tax input credit, prepaid
expenses, employee advance,
advances to vendors etc.
F Other current assets
I Unbilled revenue 1,531.40 1,461.90 217.00 125.10 -
II Interest accrued and due from
Reliance Broadcast Network Limited 63.80 3,930.20 2,481.60 - -
III Interest accrued but not due 92.90 178.70 91.30 209.40 900.66
IV
Assets held for sale
15.00 - - - -
IV Other receivables for sale of
investment / Right to investment
338.30 - - 4,066.80 3,127.30
2,041.40 5,570.80 2,789.90 4,401.30 4,027.96
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Notes:
1. The list of parties related to directors / promoters (as per SEBI ICDR Regulations, 2009) are as
follows:
Particulars
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
Trade receivables
Reliance Capital Limited 24.98 37.40 43.42 1.63 -
Reliance Capital Asset Management Limited 28.80 32.29 4.38 0.26 -
Gini & Jony Apparel Private Limited - 1.23 0.03 0.56 -
TV Today Network Limited - 0.09 - - -
Reliance Equity Advisors (India) Limited 0.31 - - - -
Reliance Broadcast Network Limited 1,513.41 1,376.70 1,337.90 - -
Reliance Life Insurance Company Limited 1.10 0.92 - - -
F-82
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
Loans, advances and other receivables
Reliance Broadcast Network Limited 63.82 10,025.20 28,749.80 26,095.00 -
Reliance Securities Limited - - - - 3,126.90
Reliance General Insurance Company Limited 0.31 - - - -
Reliance Life Insurance Company Limited 9.00 9.00 9.00 20.00 -
Total 1,641.73 11,482.83 30,144.53 26,117.45 3,126.90
2. Above data excludes amounts due from parties related to the issuer Company, which has been
disclosed in Annexure XVIII as part of related party disclosures.
3. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall
disclose in the offer document whether any of the receivable are related to directors or promoters
or the issuer in any way. In absence of clarification on “related to the directors or promoters”,
Company has disclosed amounts due from relatives of directors as defined in Schedule IA of the
Companies Act, 1956 and in case of promoters, amount due from “Promoter Group” and “Group
Companies” as defined in SEBI ICDR Regulation. The List of persons / entities classified as
“Promoter Group” and “Group Companies” has been determined by the Group and relied upon
by the Auditors.
4. Refer note 2 of IV of E of Annexure IV, note 1 of V of E of Annexure IV and note 3 of V of E of
Annexure IV for receivables and advances written off pursuant to Schemes.
F-83
Annexure IX
Reliance MediaWorks Limited
Statement of non-current liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
A Long term borrowing
I Non convertible debentures (secured) 35,000.00 - - - -
II Non convertible debentures
(unsecured) 1,650.00 - - - -
III Term loans
- From banks (secured) 20,171.30 36,131.60 39,671.57 40,000.00 37,500.00
- From banks (unsecured) 961.17 7,500.00 - 3,130.46 -
- Others (secured) 17,500.00 - - - 2,500.00
III Zero Coupon Foreign Currency
Convertible Bonds ('FCCB') - - - 14,230.00 13,099.90
IV Other loans and advances
From other parties (Secured) 366.80 - - - -
From other parties (Unsecured) 19.10 798.51 733.43 - -
75,668.37 44,430.11 40,405.00 57,360.46 53,099.90
B Other long-term liabilities
I Lease rent liability as per AS 19 -
"Leases" 3,502.20 2,784.55 1,419.60 820.05 342.98
II Dues for capital expenditure - 1.36 - - -
III Security deposit 136.80 123.14 49.30 51.80 -
3,639.00 2,909.05 1,468.90 871.85 342.98
C Long-term provision
I Leave encashment 517.00 728.03 362.00 343.16 162.76
II Gratuity 104.10 46.68 21.20 6.45 36.34
III Premium on redemption of FCCB - - - 3,084.79 2,839.89
621.10 774.71 383.20 3,434.40 3,038.99
The above statement should be read with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F-84
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities, of the Group as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
A Short term borrowing
I Term loans
- From banks (secured) - - - 10,000.00 -
- Term loan (unsecured) - 23,500.00 40,000.00 10,000.00 -
II Loans repayable on demand
(secured)
From banks
- Cash credit 1,451.20 3,264.00 985.20 37.16 293.30
III Other loans and advances
a From banks
- Buyers credit (unsecured) - 318.00 1,392.60 926.80 -
- Buyers credit (secured) 3,974.50 2,965.87 - - -
- Others (unsecured) - - 1,885.19 1,897.32 -
b Commercial Papers (unsecured) - 57,842.40 72,683.00 49,024.50 38,688.70
c Inter-corporate deposit
(unsecured) 101,345.40 15,000.00 - - 2,046.30
d From other parties (Secured) - 100.40 - - -
e From other parties (Unsecured) - 187.49 456.76 223.89 290.92
106,771.10 103,178.16 117,402.75 72,109.67 41,319.22
Above includes
Borrowings from Promoters (as
per SEBI ICDR
Regulations, 2009) / Group
companies / Subsidiaries /
Material Associate companies
97,845.30 15,000.00 - - 2,046.30
B Other current liabilities
I Current maturities of long-term
debts 24,824.90 50,633.53 35,421.68 3,130.46 0.40
II Interest accrued and due on
borrowings 2,272.40 28.80 - - -
III Interest accrued but not due on
borrowings 2,257.50 63.68 50.53 30.00 -
F-85
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities, of the Group as restated
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
IV Unclaimed dividend 10.50 12.20 13.80 14.60 8.20
V Advance received from
customers 2,187.90 2,453.30 1,759.40 924.60 5,395.10
VII Dues for capital expenditure 2,195.20 3,334.60 4,315.04 2,147.50 716.17
Temporary book overdraft 924.90 - - - -
VIII Others * 2,586.80 3,233.46 2,663.57 2,957.71 2,929.75
37,260.10 59,759.57 44,224.02 9,204.87 9,049.62
*including payable related to
employee, expense payable,
lease rent and statutory dues etc.
C Short-term
provision
I Proposed dividend - - - - 1,153.15
II Tax on proposed dividend - 7.90 9.11 41.30 210.35
III Gratuity 1.80 0.92 - 24.95 112.86
IV Leave encashment 199.10 207.17 156.80 164.15 349.65
200.90 215.99 165.91 230.40 1,826.01
The above statement should be read with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
Note: Disclosure as per SEBI ICDR Regulations, 2009 are as follows
Particulars of
Lenders
Principal
Amount
(` in lakhs)
Period when
amount is
outstanding
Interest Rate Repayment
Schedule
Reliance Capital
Limited
2,046.30 Period 2008 12.00% Repayable on
demand
Reliance Capital
Limited
15,000.00 Period 2011 12.00% One year from
date of the loan
Reliance Capital
Limited
97,845.30 Period 2012 13.00% One year from
date of the loan
The above statement should be read together with significant accounting policies and notes to summary statements
(Annexure IV). Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F-86
Annexure XI
Reliance MediaWorks Limited
Statement of revenue of the Group, as restated
(` in lakhs)
Particulars Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Theatrical exhibition
Sale of tickets 68,030.50 39,009.50 34,706.70 25,864.40 10,034.40
less: Entertainment tax 10,885.50 5,098.90 3,958.20 2,288.70 1,288.00
57,145.00 33,910.60 30,748.50 23,575.70 8,746.40
Advertisements / sponsorship revenue 3,498.40 3,684.20 4,651.70 1,465.20 1,437.80
Facilities provided at multiplex 2,345.20 1,054.70 737.30 647.30 329.10
Food and beverages 19,396.40 10,716.70 8,722.30 6,470.34 1,725.34
Others 3,879.70 2,011.70 1,850.20 1,012.60 -
86,264.70 51,377.90 46,710.00 33,171.14 12,238.64
Film production services
Processing/ printing of films 22,905.30 18,794.00 11,486.40 9,299.80 3,595.70
Equipment / facility rental income 3,665.30 2,084.60 1,566.50 612.40 265.30
Trading income 1,304.30 1,926.30 2,229.30 3,077.40 2,410.20
Others 150.90 44.30 72.30 67.40 -
28,025.80 22,849.20 15,354.50 13,057.00 6,271.20
Film / content production, distribution
and related services 9,150.90 4,980.30 9,442.70 19,707.20 12,259.10
Total 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
F-87
Annexure XII
Reliance MediaWorks Limited
Statement of other income of the Group, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
Recurring
Dividend income from :
- Other non-current investments - - - - 10.10
- Current investments 0.40 0.80 - 132.60 117.30
0.40 0.80 - 132.60 127.40
Interest income from:
- Bank 733.40 364.90 326.80 496.70 737.30
- Loans, advance and other
deposits 522.30 503.50 211.80 470.40 230.40
1,255.70 868.40 538.60 967.10 967.70
Gain on sale of current
investments 39.50 423.60 274.40 269.20 32.40
Bad debts recovered/ provision
written back 85.60 1,405.50 1,080.90 - -
Sundry balances written back
(net) - 306.30 - - -
Foreign exchange gain advances,
trade receivables and trade
payables (net) - - 80.10 1,070.70 -
Miscellaneous income 101.00 119.40 69.70 648.41 762.60
Non Recurring
Gain on derivative contracts
(net) - - - - 977.40
Gain on sale of investments /
rights therein (long term) 563.30 - - 1,700.00 2,660.30
Consultation fees - - - 2,130.45 -
Proceeds from keyman insurance
policy - - - 266.44 -
Share of advertisement income - - 1,213.00 - -
Profit on sale of assets /
discarding of assets (net) - 2,694.80 - - -
2,045.50 5,818.80 3,256.70 7,184.90 5,527.80
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Note
1. The classification of other income by the management into recurring and non-recurring is based on
the current operations and business activities of the Company.
F-88
2. Other income is related / incidental to the business activities of the Company.
3. In accordance with the accounting treatment followed by the Company, exchange fluctuation gain / loss
and profit / loss on sale of assets is disclosed net. Gross amounts in respect thereof are not readily
determinable. Hence, net gain where applicable has been considered for the purpose of above disclosure.
F-89
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
Contingent Liabilities of Parent
Company A Central excise
Disputed central excise demand
pending with the Central Excise and
Service Tax Appellate Tribunal 2,555.90 1,918.40 1,715.30 1,308.60 1,110.90
B Value added tax
Disputed value added tax demand
pending for various states 38.40 - - - -
C Service tax
Disputed service tax demand pending
with the Central Excise and Service
Tax Appellate Tribunal 204.90 - - - -
C Income tax
i) Disputed liability in respect tax
deduction at source, matter is pending
with Commissioner of Income tax
(Appeals) 1,017.10 1,017.10 - - -
ii) Disputed tax liability in respect of AY
2008-09 for Rave Entertainment
Private Limited („REPL‟), REPL was
wholly owned subsidiary of the
Company and merged with it with
effect from April 1, 2008.
Department‟s appeal against order of
Commissioner of Income Tax
(Appeals) is pending with Income Tax
Appellant 1,401.20 1,401.20 - - -
Tribunal (ITAT). In Period 2011 the
same was pending with Commissioner
of Income Tax (Appeals).
Further Company has received
demand in respect of REPL matter for
assessment year 2009-10, appeal is
pending with Commissioner of
Income tax (Appeals)
1,787.20 - - - -
F-90
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
D Entertainment tax
i) In respect of certain multiplexes, the
Company has made an application for
availing exemption under the relevant
Act retrospectively from the date of
commencement of the operations of
the said multiplex and the application
is pending approval
300.70 219.40 340.00 391.29 357.40
ii) In respect of certain multiplexes, the
Company is in dispute with the
entertainment tax authorities regarding
eligibility for availing exemption
under the relevant Act. 509.60 558.80 451.70 293.45 219.40
iii) In respect of demand orders received
for payments of entertainment tax
collected and not paid to the
authorities, the Company has made an
appeal against said demand orders as
it believes that the same is not
payable, being exemption from
payment available to it - 113.20 107.50 62.94 56.89
iv) The Company shall be liable to pay
the entertainment tax in the event that
the multiplexes do not continue
operations for a period of 10 years
from the respective dates from which
they commenced their operations 12,845.00 11,125.20 10,614.90 5,747.47 4,404.40
E Claim against Company not
acknowledged as debts
7,859.80 198.60 74.00 74.00 74.00
The Company has engaged the
services of a Contractor for the
purpose of deploying personnel at its
cinemas. During the tenure of the
contract, the Company has paid the
Contractor, amounts payable towards
employers
F-91
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
The Company has engaged the
services of a Contractor for the
purpose of deploying personnel at its
cinemas. During the tenure of the
contract, the Company has paid the
Contractor, amounts payable towards
employers contribution to provident
fund (PF) amounting to ` 294.20 lakhs
on a regular basis. The Company has
learnt that the Contractor has failed to
deposit appropriate amounts for
employee and employer contributions
amounting to approximately ` 588.40
lakhs with the PF authorities and the
Company apprehends that some
portion of the aforesaid amount which
was supposed to be deposited in the
individual accounts of the Personnel
by the Contractor may have actually
been mis-appropriated by the
Contractor. The Company has filed a
criminal complaint against the
Contractor and the matter is currently
under investigation. The Company has
not received any claims in
this regard.
F Value Added Tax:
The Maharashtra Value Added Tax
Act, 2002 lists the Scheduled entry,
interalia, “Copy right” w.e.f. April 1,
2005. Pursuant to this enactment/
scheduled entry, the entertainment
F-92
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
industry has made a written
representation to the Finance Minister,
Maharashtra for deletion of the
scheduled entry from the Act. Similar
representation was made by the
industry in some other states, as a
result of which the Act was modified
to delete this scheduled entry. The
Company is awaiting a positive
response from the Ministry of Finance
in respect of the assurance given.
Accordingly, no provision (amount
not currently ascertainable) has been
made in the books of accounts.
With effect from May 1, 2011 the
Maharashtra Value Added Tax Act,
2002 was amended to exempt the on
Copyrights for distributon and
exhibition of cinematographic films in
theatres and cinema halls
G
Guarantees given to bank and others
for loans/credit facilities given to
others 183.00 - - - -
H Capital Commitment
i) Estimated amount of contract
remaining to be executed on capital
account and not provided for net of
advances (for fixed 4,803.00 5,269.90 12,248.70 6,386.90 13,599.60
assets)
ii) Estimated amount of contract
remaining to be executed on capital
account and not provided for net of
advances (for investments) 1,200.00 1,200.00 - - -
iii) Amount of uncalled on 1,500,000
partly paid preference shares of Tree
of Knowledge DOT COM Private
Limited - - - 300.00 300.00
F-93
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
I Contingent liabilities of Subsidiary
Companies
i) Disputed Income tax liability, wherein
the Subsidiary has filed an appeal
before the first appellate authority - 7.50 7.50 - -
Octroi / Cess Tax
ii) Disputed Cess Tax Demand pending
with Deputy Commissioner, Navi
Mumbai Municipal Corporation-Cess
Department. The Company believes,
being an SEZ unit it is fully exempt
from payment of Octroi/Cess Tax as
per Maharashtra IT-ITEs policy, 2009.
The amount of ` 96.56 lakhs
deposited, as Tax demand, for the
purpose of admission of Appeal is
reflected as Short Term Loans and
Advances. 536.90 - - - -
iii) Claims against a subsidiary not
acknowledged as debts - 112.00 64.20 - -
vi) A subsidiary of the Company has
received an adverse judgement with
regard to a cancelled lease.
During the current provided, the
Company has provided for the
judgement - 2,211.00 - - -
J Share of Contingent liabilities in the
Joint Ventures („JV‟)
F-94
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
A Joint Venture had received demand
orders for payment of entertainment
tax collected and not paid to the
authorities aggregating to ` 198.10
lakhs. The Bombay High Court
passed an order dated October 21,
2008 in favour of the JV, upholding
the exemption of payment from
entertainment tax available to the JV
and has also directed the State
Government to refund the amount of `
20 lakhs deposited by the JV. The
State Government had preferred a
special leave petition („SLP‟) before
the Supreme Court of India
challenging the said Order and the
judgment passed by the Bombay High
Court. Based on a legal opinion
obtained by the JV, the JV had made a
provision aggregating to ` 18.30 lakhs
in the books of accounts - - - 89.90 89.90
However, the Supreme Court vide its
Order dated July 27, 2009, directed
the Chief Minister of Maharashtra to
realise the amount to the extent the JV
has unjustly enriched itself and pay
the same to a voluntary or a charitable
organisation. The management of the
JV has subsequently paid the entire
amount of entertainment tax
demanded aggregating to ` 187.30
lakhs
A Joint Venture shall be liable to pay
entertainment tax in the event that the
Multiplex does not continue
operations for the period of ten years
from the date of commercial
operations 96.90* 96.90* 929.40 926.20 926.20
F-95
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
As per amendment made by Finance
Act 2010, renting of immovable
property is defined as a taxable service
with retrospective effect from June 1,
2007. Based on a legal opinion
obtained by the management joint
venture has reversed the unpaid
service tax liability. - 16.40 15.90 - -
Disputed VAT liability of a Joint
Venture - 1.80 1.80 - -
Claims against a Joint Venture not
acknowledged as debts 1.10 1.10 1.10 - -
* Amount is not currently quantifiable in case of a joint venture
Note:
a) The Group is a party to various legal proceedings in the normal course of business and does not
expect the outcome of these proceedings to have any adverse effect on its financial conditions,
results of operations or cash flows.
b) The amounts are excluding penalty and interest if any that would be levied at the time of final
conclusion.
Other Commitment :-
a) In view of the loss during the period, the Company has not created Debenture Redemption Reserve in terms
of Section 117 (C) of the Companies Act, 1956. The Company shall create such reserve out of profit, if any in
future years.
b) Preference shares shall be redeemed at the end of 20 years from the date of allotment. Each Preference shares
shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a. (till date of
redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend, if declared
during the tenure. However, the premium on redemption will be paid only to the original subscribers or to the
transferees if the transfers have been previously approved by the Company. Yield on preference shares of `
1,487.10 for Period 2012 will be paid as premium at the time of redemption.
The above statement should be read together with significant accounting policies and notes to summary statements,
as restated, of the Group (Annexure IV).
F-96
Annexure XIV
Reliance MediaWorks Limited
Statement of accounting ratios based on adjusted profits related to earnings per share, net asset value and return on
net worth of the Group
(` in lakhs)
Particulars
Period
2012 Period 2011
Period
2010
Period
2009
Period
2008
1 Net (loss) / profit after tax, as
restated (after dividend on
preference shares (91,067.62) (32,871.49) (12,865.84) (7,901.62) 1,900.24
2 Weighted average number of
Equity Share outstanding during
the period for basic earning per
share 46,126,170 46,126,170 46,126,170 46,126,170 42,103,935
3 Add - equity share issuable on
conversion of FCCB (Refer note
(c) of B of Annexure IV) - 1,694,699 2,061,884 2,061,884 6,084,140
4 Weighted average number of
equity share outstanding during the
Period for dilutive earnings per
share (Refer note (c) of B of
Annexure IV) 46,126,170 47,820,869 48,188,054 48,188,054 48,188,075
5 Number of equity shares
outstanding at the end of the period 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170
6 Paid up value of each equity share 5.00 5.00 5.00 5.00 5.00
7 Total paid capital – equity 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
8 Reserves and surplus (net of deficit
in statement of profit and loss)
(excluding revaluation reserve) (60,603.61) 354.13 33,484.92 46,909.94 65,476.74
9 Net worth attributable to equity
shareholders (7+8) (58,297.30) 2,660.44 35,791.23 49,216.25 67,783.05
Accounting Ratios
a) Earning per share
Basic earning per share (197.43) (71.26) (27.89) (17.13) 4.51
Diluted earning per share (197.43) (71.26) (27.89) (17.13) 3.94
b) Return of net worth (refer note 7
below) NA (1,235.56)% (35.95)% (16.05)% 2.80%
F-97
Annexure XIV
Reliance MediaWorks Limited
Statement of accounting ratios based on adjusted profits related to earnings per share, net asset value and return on
net worth of the Group
(` in lakhs)
Particulars
Period
2012 Period 2011
Period
2010
Period
2009
Period
2008
c)
Net assets value per share (126.39) 106.70 146.95 5.77 77.59
Note
1 The ratios have been
computed as under :-
Basic and diluted earning per
share
Net profit / (loss) after tax, as restated, excluding extraordinary
items attributable to equity shareholders
Weighted average number of equity share outstanding during the
period
Return on Net worth %
Net profit / (loss) after tax, as restated, excluding extraordinary
items attributable to equity shareholders
Net worth, as restated, excluding revaluation reserve at the end of the
period
Net assets value per share (`)
Net worth, as restated, excluding revaluation reserve at the end of
the period
Number of equity share outstanding at the end of the year/ period
2 Restated net profit as appearing in the restated statement of profit and loss and net worth as appearing in
summary statement of assets and liabilities, as restated, has been considered for the purpose of computing the
above ratios.
3 Calculation of ratios post issue has not been considered.
4 Earnings per share calculations are done in accordance with Accounting Standard 20 "Earning Per Share",
notified in the Companies (Accounting Standards) Rules, 2006.
5 The above statement should be read together with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
6 Dilutive EPS has not been presented in Period 2009, Period 2010 and Period 2011, since it is anti dilutive.
7 Return on net worth for the Period 2012 cannot be computed as net worth as on September 30, 2012 is
negative.
8 Dividend on preference capital is non-cumulative. Yield on preference shares of ` 1,487.10 lakhs will be paid
as premium at the time of redemption and shall be adjusted against securities premium reserve. Accordingly,
the same is not adjusted for the purpose of calculating the above ratios.
F-98
Annexure XV
Reliance MediaWorks Limited Statement of principal terms and conditions of long-term borrowings and short-term borrowings of the Group
(` in lakhs)
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
1. Commercial Papers / Short Term Loans from Banks (unsecured)
A Templeton Mutual Fund (Refer note
9 of Annexure XV) - 21,984.79 - - -
B ICICI Prudential (Refer note 9 of
Annexure XV) - 9,943.51 - - -
C Templeton Mutual Fund (Refer note
9 of Annexure XV) - 9,422.16 - - -
D Yes Bank Limited (Refer note 9 of
Annexure XV) - 11,619.63 - - -
E BNP Paribas (Refer note 9 of
Annexure XV) - 4,872.31 - - -
F LIC MF Savings Plus Fund - - 7,450.18 - -
G LIC MF Income Plus - - 9,832.06 - -
H LIC MF Floating Rate - - 983.21 - -
I LIC MF Savings Plus Fund - - 9,808.90 - -
J J M Financial Mutual Fund - - 2,477.40 - -
K J M Financial Mutual Fund - - 1,486.43 - -
L LIC MF Income Plus - - 9,599.87 - -
M LIC MF Savings Plus Fund - - 9,599.87 - -
N IFCI Limited - - 2,466.68 - -
O LIC MF Floating Rate - - 4,744.82 - -
P LIC MF Savings Plus Fund - - 4,744.53 - -
Q LIC MF Income Plus - - 9,489.05 - -
R Yes Bank Limited - - - 14,886.41 -
S IDBI Limited - - - 2,457.18 -
T SIDBI - - - 491.44 -
U Canara Bank - - - 2,456.18 -
V IFCI Limited - - - 4,893.69 -
W LIC MF Floating Rate Fund - - - 4,767.92 -
X LIC MF Income Plus Fund - - - 4,767.92 -
Y LIC MF Liquid Fund - - - 4,767.92 -
Z LIC MF Savings Plus Fund - - - 4,767.92 -
AA LIC MF Special Unit Scheme - - - 4,767.92 -
AB UTI Mutual Funds - liquid cash plan - - - - 1,973.16
AC ABN Amro Money Plus Fund - - - - 4,932.89
AD Lotus India Liquid Fund - - - - 1,973.16
F-99
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
AE Birla Sun Life Interval Income Fund
Quarterly Plan Series II - - - -
5,297.62
AF Kotak Quarterly Interval Plan -
Series 6
- - - - 2,408.01
AG Allahabad Bank - - - - 1,965.13
AH Birla Cash Plus - - - - 4,421.54
AI United Bank Of India - - - - 3,438.97
AJ UTI Spread Fund - - - - 2,456.41
AK Saraswat Co-op Bank Ltd. - - - - 982.42
AL SBI Life Insurance Co. Ltd. - - - - 2,456.04
AM Tata MF - Tata Fixed Horizon Fund - - - - 3,928.19
AN ABN Amro Flexi Short Term Plan -
Series B - - - - 2,455.16
AO Kotak Mahindra flexi Debt Scheme - - - - -
AP Birla Cash Plus - - - - -
AQ Allahabad Bank Loan - - 10,000.00 10,000.00 -
AR Revolving line of credit from ICICI
Bank, New York Branch - - 1,885.19
1,897.28 -
AS Syndicate Bank Loan - 10,000.00 10,000.00 - -
AT Union Bank of India Loan - 10,000.00 10,000.00 - -
AU Bank of Baroda Loan - - 10,000.00 - -
AV Yes Bank Limited - 3,500.00 - - -
Sub Total -
15,000.00
81,342.40 114,568.19 60,921.78 38,688.70
2. Unsecured Long Term Loan from Bank (including amounts due within the next 1 year)
A Canara Bank Loan - 20,000.00 - - -
B DBS Bank Limited (Refer note 9 of
Annexure XV) - 15,000.00 - - -
C ICICI Bank Loan, New York Branch - - 2,701.81 6,260.92 -
D Non-convertible debentures 3,850.00
3,850.00 35,000.00 2,701.81 6,260.92 -
3. Secured Short Term Loan From Bank / Other Loans form Bank (including amounts due within the
next 1 year)
A Syndicate Bank (Refer note 6 of
Annexure XV) - - - 10,000.00 -
B Bank Asiana – Working Capital
Lines (Refer note 12 of Annexure
XV)
961.17
- - - -
Sub Total 961.17 - - 10,000.00 -
4. Secured Long Term Loan From Bank / Other Long Term Loan (including amounts due within the
next 1 year)
A Allahabad Bank (Refer note 1 of
Annexure XV)*
1,666.67 3,333.33 5,000.00 5,000.00 -
B Exim Bank (Refer note 1 of
Annexure XV)* 2,333.34 4,666.68 7,000.00 7,000.00
-
F-100
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
C Jammu & Kashmir Bank (Refer
note 1 of Annexure XV)* 2,333.34 4,666.68 7,000.00 7,000.00
-
D Syndicate Bank (Refer note 1 of
Annexure XV)* 2,333.34 4,666.68 7,000.00 7,000.00
-
E Union Bank of India (Refer note 1
of Annexure XV)* 2,000.00 4,000.00 6,000.00 6,000.00
-
F Vijaya Bank (Refer note 1 of
Annexure XV)* 2,666.67
5,333.33 8,000.00 8,000.00 -
G Rank Investments Private Limited
(Refer note 1 of Annexure XV)
- - - - 2,500.00
H Barclays Bank Plc (Refer note 1 of
Annexure XV)
- - - - 37,500.00
I Syndicate Bank (Refer note 6 of
Annexure XV)
- 6,250.00 10,000.00 - -
J Syndicate Bank (Refer note 1 of
Annexure XV)
10,312.50 15,000.00 - - -
K Union Bank of India (Refer note 1 of
Annexure XV)
4,800.00 6,000.00 3,500.00 - -
L Syndicate Bank (Refer note 1 of
Annexure XV) 10,000.00
- - - -
M Non Convertible Debentures (Refer
note (Refer note 9 &10 of Annexure
XV)
35,000.00 - - - -
N Indiabulls Financial Service Limited
(Refer note 14 of Annexure XV)
17,500.00 - - - -
O Axis Bank – Term loan (Refer note
11 of Annexure XV)
4,208.79 5,348.40 3,484.42 - -
Sub Total 95,154.65 59,265.15 56,984.42 40,000.00 40,000.00
* - As per agreement dated June 28, 2008 for long term loan obtained from banks, the Company has to comply with
covenants with regards to financial parameters, as specified in the agreement. Based on Period 2009, 2010, 2011 and
2012 financials, the Company is not in compliance with the debt covenants.
5. Overdraft facilities / Working Capital Demand Loans from Banks / Car Loan
A Cash credit-Bank of Baroda (Refer
note 2, 4,6 and 15 of Annexure XV)
554.60 540.53 352.63 37.20 293.32
B Cash Credit – Axis Bank (Refer note
2, 4, 5, 6 and 15 of Annexure XV)
- 1,959.47 - - -
C Cash Credit – Axis Bank (Refer note
11 of Annexure XV)
896.60 764.00 533.62 - -
D Cash Credit - - 99.25 - -
E Others (Car loan) (Refer note 3 of
Annexure XV)
- - - - 0.70
F Buyers credit (Refer note 2, 4,6, 7
and 15 of Annexure XV) 3,974.50 2,965.90 - - -
Sub Total 5,425.70 6,229.90 985.50 37.20 294.00
6. Others (Unsecured)
F-101
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March 31,
2008
A Zero Coupon FCCB (Refer note 8
of Annexure XV)
- - 15,224.30 14,230.00 13,099.90
B Inter Corporate Deposits 101,345.40 15,000.00 - - 2,046.30
C Buyers Credit - 318.00 1,392.68 926.80 -
D Others - 187.49 456.80 223.89 290.60
E Others (long-term) 19.10 798.51 733.40 - -
F NIC Bank – Term loan - - 182.33 - -
Subtotal 101,364.50 16,304.00 17,989.51 15,380.69 15,436.80
7. Others (Secured) (including amounts due within the next 1 year)
A Equipment loan (refer note 13 of
Annexure XV)
60.88 100.40 - - -
B Finance lease obligations to HP
Financial Services
447.47 - - - -
Subtotal 508.35 100.40 - - -
Grand Total 207,264.37 198,241.80 193,229.43 132,600.59 94,419.52
Period 2012
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Allahabad Bank *
1,666.67
13.25% per annum ` 1,666.67 due on
March 31, 2013
Exim Bank *
2,333.34
13.25% per annum ` 2,333.34 due on
March 31, 2013
Jammu & Kashmir Bank *
2,333.34
13.25% per annum ` 2,333.34 due on
March 31, 2013
Syndicate Bank *
2,333.34
13.25% per annum `2,333.34 due on March
31, 2013
Union Bank of India *
2,000.00
13.25% per annum ` 2,000.00 due on
March 31, 2013
Vijaya Bank *
2,666.67
13.25% per annum ` 2,666.67 due on
March 31, 2013
Union Bank of India 4,800.00
14.00% per annum ` 400 .00 - 20 equal
quarterly instalment
starting from March 31,
2012
Syndicate Bank
10,312.50
13.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from September
14, 2011
Syndicate Bank
10,000.00
11.75% per annum ` 2,500.00 - 4 equal
quarterly instalment
starting from September
14, 2013
Buyers Credit
3,974.50
Libor Linked –
Various
Various Dates
Inter Corporate Deposit - Magma Fincorp 2,200.00 12.00% per annum March 26, 2013
F-102
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Limited
Inter Corporate Deposit - Magma Fincorp
Limited 1,300.00
12.00% per annum April 29, 2013
Inter-corporate deposit – Reliance Capital
Limited 97,845.40
13.00% per annum Various Dates
Non Convertible debentures
3,850.00
12.50% per annum All series of ` 550 lakhs
Series B – December
10, 2012
Series C – March 10,
2013
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December 10,
2013
Series G – March 10,
2014
Series H – June 10,
2014
Indiabulls Financial Services Limited
17,500.00
12.79% per annum 6 equal monthly
instalments starting the
13th
month from the
date of disbursement
Bank of Baroda (cash credit) 554.60 13.50% per annum Repayable on demand
Axis Bank (cash credit – RMWSL) 896.60 13.75% per annum Repayable on demand
Non Convertible Debentures
35,000.00
11.00% per annum Series 1 - ` 10,000
lakhs – March 1, 2014
Series 2 - ` 12,500
lakhs – March 1, 2015
Series 3 - ` 12,500
lakhs – March 1, 2016
Axis Bank – Term loan – RMWSL
4,208.79
13.75% per annum
18 unequal quarterly
instalment starting from
December 31, 2010
Equipment loan – Lowry
60.88
11.00% per annum repayable in 40 prorated
monthly instalments
Bank Asiana – Working Capital Lines
961.17
6.25% per annum May 17, 2012
HPFS –Equipment Loan 447.47 12.95% per annum Various Dates
Inter Corporate Deposit - Divya Shakti
Marketing Pvt. Ltd. 19.10
Interest free
Total 207,264.37
* - Details of delayed repayment of loans:
F-103
Nature of loan Principal amount (` in
lakhs)
Due date Date of payment
Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012
Secured term loan 13,333.33 March 31, 2012 May 11, 2012
Secured term loan 1,250.00 December 16, 2011 December 30, 2011
Secured term loan 1,000.00 May 3, 2012 May 6, 2012
Period 2011
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Templeton Mutual Fund 21,984.79 11.75% per annum June 15, 2011
ICICI Prudential Fund 9,943.51 11.15% per annum April 20, 2011
Templeton Mutual Fund 9,422.16 11.75% per annum October 12, 2011
Yes Bank Limited 11,619.63 11.75% per annum November 25, 2011
BNP Paribas Mutual Fund
4,872.31 12.00% per annum June 20, 2011
Allahabad Bank 3,333.33 10.25% per annum ` 1,666.67 due on
March 31, 2012.
` 1,666.67 due on
March 31, 2013
Exim Bank 4,666.68 10.25% per annum ` 2,333.34 due on
March 31, 2012.
` 2,333.34 due on
March 31, 2013
Jammu & Kashmir Bank 4,666.68 10.25% per annum ` 2,333.34 due on
March 31, 2012.
` 2,333.34 due on
March 31, 2013
Syndicate Bank 4,666.68 10.25% per annum ` 2,333.34 due on
March 31, 2012.
` 2,333.34 due on
March 31, 2013
Union Bank of India 4,000.00 10.25% per annum ` 2,000.00 due on
March 31, 2012.
` 2,000.00 due on
March 31, 2013
Vijaya Bank 5,333.33 10.25% per annum ` 2,666.67 Due on
March 31, 2012.
` 2,666.67 Due on
March 31, 2013
Syndicate Bank 6,250.00
12.00% per annum ` 1,250.00 - 8 equal
quarterly
instalment started
from September 17,
2010
Union Bank of India 6,000.00
13.00% per annum ` 400.00 - 20 equal
quarterly
instalment starting
F-104
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
from March 31,
2012
Syndicate Bank 15,000.00
12.00% per annum ` 937.50 - 16 equal
quarterly
instalment starting
from September 14,
2013
Canara Bank 12,500.00 11.50% per annum March 28, 2012
7,500.00 11.50% per annum May 15, 2012
Syndicate Bank 10,000.00 9.00% per annum May 27, 2011
Union Bank of India 10,000.00 10.50% per annum May 23, 2011
Yes Bank Limited 3,500.00 12.50% per annum May 27, 2011
DBS Bank Limited 15,000.00 11.40% per annum January 24, 2012
Buyers credit 3283.90 Libor Linked –
Various
Various Dates
Bank of Baroda (cash credit) 540.53 11.00% per annum Repayable on
demand
Axis Bank (cash credit) 1,959.47 12.75% per annum Repayable on
demand
Axis Bank – Term loan 5,348.40 13.75% per annum 18 unequal
quarterly
instalment starting
from December 31,
2010
Equipment loan – Others 100.40 11.00% per annum repayable in 40
prorated monthly
instalments
Cash Credit – Axis Bank 764.00 12.50% per annum Repayable on
demand
Reliance Capital Limited 15,000.00 12.00% per annum Various dates
Others 986.00 Interest free Various dates
Total 198,241.80
Period 2010
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
LIC MF Savings Plus 7,450.18 6.60% per annum May 10, 2010
LIC MF Income Plus 9,832.06 5.50% per annum July 26, 2010
LIC MF Floating Rate 983.21 5.50% per annum July 26, 2010
F-105
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
LIC MF Savings Plus Fund 9,808.90 5.50% per annum August 11, 2010
JM Financial Mutual Fund 2,477.40 6.30% per annum May 25, 2010
JM Financial Mutual Fund 1,486.43 6.30% per annum May 25, 2010
LIC MF Income Plus 9,599.87 6.25% per annum December 3, 2010
LIC MF Savings Plus 9,599.87 6.25% per annum December 3, 2010
IFCI Ltd. 2,466.68 7.75% per annum June 4, 2010
LIC MF Floating Rate 4,744.82 7.25% per annum December 29, 2010
LIC MF Savings Plus 4,744.53 7.25% per annum December 29, 2010
LIC MF Income Plus 9,489.05 7.25% per annum December 29, 2010
Allahabad Bank 5,000.00 10.75% per annum ` 1,666.67 due on
March 31, 2011.
` 1,666.67 due on
March 31, 2012
` 1,666.67 due on
March 31, 2013
Exim Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Syndicate Bank 7,000.00
10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 due on
March 31, 2011.
` 2,000.00 due on
March 31, 2012
` 2,000.00 due on
March 31, 2013
F-106
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 due on
March 31, 2011.
` 2,666.67 due on
March 31, 2012
` 2,666.67 due on
March 31, 2013
Syndicate Bank 10,000.00
10.00% per annum ` 1250.00 - 8 equal
quarterly
instalment starting
from September 17,
2010
Union Bank of India 3,500.00
11.00% per annum ` 400 - 20 equal
quarterly
instalment starting
from March 31,
2012
Allahabad Bank 10,000.00 7.75% per annum September 24,
2010
Syndicate Bank 10,000.00 7.50% per annum June 22, 2010
Union Bank of India 10,000.00 7.00% per annum June 11, 2010
Bank of Baroda 10,000.00 7.75% per annum July 10, 2010
Buyers Credit 1,392.68 Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of Annexure XV) 15,224.30 - January 25, 2011
Bank of Baroda (cash credit) 352.63 11.00% per annum Repayable on
demand
Axis Bank – Term loan 3,484.42 10.75% 18 unequal
quarterly
instalment starting
from December 31,
2010
NIC Bank – Term loan 182.33 12% 16 un-equal
quarterly
instalments
Cash Credit – Axis Bank 533.62 10.75% Repayable on
demand
Cash Credit – NIC Bank 99.25 12.50% Repayable on
demand
F-107
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
ICICI Bank 1,885.19 Benchmark +
0.25% per annum
Within 30 months
from date of
disbursement
ICICI Bank 2,701.81 Benchmark +
3.20% per annum
Within 30 months
from date of
disbursement
Others 1,190.20 Interest free Various dates
Total 193,229.43
Period 2009
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Yes Bank Limited 14,886.41 9.75% per annum April 30, 2009
IDBI Limited 2,457.18 10.00 % per annum June 4, 2009
SIDBI 491.44 10.00 % per annum June 4, 2009
Canara Bank 2,456.18 10.25 % per annum June 4, 2009
IFCI 4,893.69 10.20 % per annum June 18, 2009
LIC MF Floating Rate Fund 4,767.92 10.75 % per annum September 14,
2009
LIC MF Income Plus Fund 4,767.92 10.75 % per annum September 14,
2009
LIC MF Liquid Fund 4,767.92 10.75 % per annum September 14,
2009
LIC MF Savings Plus Fund 4,767.92 10.75% per annum September 14,
2009
LIC MF Special Unit Scheme 4,767.92 10.75% per annum September 14,
2009 Allahabad Bank 5,000.00 10.75% per annum ` 1,666.67 due on
March 31, 2011.
` 1,666.67 due on
March 31, 2012
` 1,666.67 due on
March 31, 2013
Exim Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
F-108
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Syndicate Bank 7,000.00
10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 due on
March 31, 2011.
` 2,000.00 due on
March 31, 2012
` 2,000.00 due on
March 31, 2013
Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 due on
March 31, 2011.
` 2,666.67 due on
March 31, 2012
` 2,666.67 due on
March 31, 2013
Allahabad Bank 10,000.00 13.50% per annum January 8, 2010
Syndicate Bank 10,000.00 13.50% per annum December 31,
2009
Buyers Credit 926.80 Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of Annexure XV) 14,230.00 - January 25, 2011
ICICI Bank 6,260.92 Benchmark +
3.20% per annum
Within 30 months
from date of
disbursement
ICICI Bank 1,897.28 Benchmark +
0.25% per annum
Within 30 months
from date of
disbursement
Bank of Baroda (cash credit) 37.20 11.00% per annum Repayable on
demand
Others 223.89 Interest free Various dates
Total 132,600.59
F-109
Period 2008
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
UTI Mutual Funds - liquid cash plan 1,973.16 10.25% per
annum
May 20, 2008
ABN Amro Money Plus Fund 4,932.89 10.25% per annum May 20, 2008
Lotus India Liquid Fund 1,973.16 10.25% per annum May 20, 2008
Birla Sunlife Interval Income Fund 5,297.62 10% per annum August 20, 2008
Kotak Quarterly Interval Plan - Series 6 2,408.01 10% per annum August 20, 2008
Allahabad Bank 1,965.13 10.20 % per
annum
June 4, 2008
Birla Cash Plus 4,421.54 10.20 % per
annum
June 4, 2008
United Bank Of India 3,438.97 10.20 % per
annum
June 4, 2008
UTI Spread Fund 2,456.41 10.20% per annum June 4, 2008
Saraswat Co-op Bank Ltd. 982.42 10.28% per annum June 4, 2008
SBI Life Insurance Co. Ltd. 2,456.04 10.28% per annum June 4, 2008
Tata MF - Tata Fixed Horizon Fund 3,928.19 10.50% per annum June 4, 2008
ABN Amro Flexible Short Term Plan - Series B 2,455.16
10.50% per annum June 4, 2008
Rank Investments Private Limited 2,500.00 10.75% per annum ` 833.34 due on
March 31, 2011.
` 833.34 due on
March 31, 2012
` 833.32 due on
March 31, 2013
Barclays Bank PLC 37,500.00 10.75% per annum ` 12,500.00 due on
March 31, 2011.
` 12,500.00 due on
March 31, 2012 `
12,500.00 due on
March 31, 2013
ICICI (car loan) 0.70 Various rates As per schedule
Zero Coupon FCCB (Refer note 8 of Annexure XV) 13,099.90 - January 25, 2011
Inter-corporate deposit – Reliance Capital limited 2,046.30 12.00% per annum Repayable on
demand
F-110
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Bank of Baroda (cash credit) 293.32 11.25% per annum Repayable on
demand Others 290.60 Interest free Various dates
Total 94,419.52
Commercial Paper:
Details of Terms of Discount rate and repayment schedule of Commercial papers are set out below:
Period 2011
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Templeton MF (4,500 commercial paper of face value `
500,000 each dated December 28, 2010 aggregating to `
22,500 lakhs)
21,984.79 Issued at `
21,339.08 lakhs,
discount rate 11.75
% per annum
June 15, 2011
ICICI Prudential Mutual Fund (2,000 commercial paper of
face value ` 500,000 each dated January 20, 2011
aggregating to ` 10,000 lakhs)
9,943.51 Issued at `
9,732.42 lakhs,
discount rate 11.15
% per annum
April 20,
2011
Templeton MF (2,000 commercial paper of face value `
500,000 each dated February 3, 2011 aggregating to `
10,000 lakhs)
9,422.16 Issued at `
9,252.39 lakhs,
discount rate 11.75
% per annum
October 12,
2011
Yes Bank Ltd (2500 commercial paper of face value `
500,000 each dated February 25, 2011 aggregating to `
12,500 lakhs)
11,619.63 Issued at `
11,490.20 lakhs,
discount rate 11.75
% per annum
November
25, 2011
BNP Paribas Mutual Fund (1,000 commercial paper of face
value ` 500,000 each dated March 21, 2011 aggregating to
` 5,000 lakhs)
4,872.31 Issued at `
4,854.75 lakhs,
discount rate 12.00
% per annum
June 20, 2011
Total 57,842.40
Period 2010
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Savings Plus (1,500 commercial paper of face
value ` 500,000 each dated June 3, 2009 aggregating to `
7,500 lakhs)
7,450.18 Issued at `
7,064.41 lakhs,
discount rate 6.60
% per annum
May 10, 2010
LIC MF Income Plus (2,000 commercial paper of face value
` 500,000 each dated October 28, 2009 aggregating to `
10,000 lakhs)
9,832.06 Issued at ` 9607.67
lakhs, discount rate
5.50 % per annum
July 26, 2010
LIC MF Floating Rate (200 commercial paper of face value
` 500,000 each dated October 28, 2009 aggregating to `
1,000 lakhs)
983.21 Issued at ` 960.77
lakhs, discount rate
5.50 % per annum
July 26, 2010
F-111
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated November 13, 2009 aggregating
to ` 10,000 lakhs)
9,808.90 Issued at ` 9607.67
lakhs, discount rate
5.50 % per annum
August 11,
2010
J M Financial Mutual Fund (500 commercial paper of face
value ` 500,000 each dated November 25, 2009 aggregating
to ` 2,500 lakhs)
2,477.40 Issued at ` 2424.26
lakhs, discount rate
6.30 % per annum
May 25, 2010
J M Financial Mutual Fund (300 commercial paper of face
value ` 500,000 each dated November 30, 2009 aggregating
to ` 1,500 lakhs)
1,486.43 Issued at ` 1455.78
lakhs, discount rate
6.30 % per annum
May 25, 2010
LIC MF Income Plus (2,000 commercial paper of face value
` 500,000 each dated January 29, 2010 aggregating to `
10,000 lakhs)
9,599.87 Issued at ` 9499.02
lakhs, discount rate
6.25 % per annum
December 3,
2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated January 29, 2010 aggregating to
` 10,000 lakhs)
9,599.87 Issued at ` 9499.02
lakhs, discount rate
6.25 % per annum
December 3,
2010
IFCI Ltd. (2,000 commercial paper of face value ` 500,000
each dated January 29, 2010 aggregating to ` 10,000 lakhs)
2,466.68 Issued at ` 2452.10
lakhs, discount rate
7.75 % per annum
June 4, 2010
LIC MF Floating Rate (1000 commercial paper of face
value ` 500,000 each dated March 9, 2010 aggregating to `
5,000 lakhs)
4,744.82 Issued at `
4,723.24 lakhs,
discount rate 7.25
% per annum
December 29,
2010
LIC MF Savings Plus (1000 commercial paper of face value
` 500,000 each dated March 15, 2010 aggregating to `
5,000 lakhs)
4,744.53 Issued at `
4,728.56 lakhs,
discount rate 7.25
% per annum
December 29,
2010
LIC MF Income Plus (2000 commercial paper of face value
` 500,000 each dated March 15, 2010 aggregating to `
10,000 lakhs)
9,489.05 Issued at `
9,457.12 lakhs,
discount rate 7.25
% per annum
December 29,
2010
Total 72,683.00
Period 2009
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Yes Bank Limited (3,000 commercial paper of face
value ` 500,000 each dated February 3, 2009
aggregating to ` 15,000 lakhs)
14,886.41 Issued at `
14,663.14 lakhs,
discount rate 9.75
% per annum
April 30, 2009
IDBI Limited (500 commercial paper of face value `
500,000 each dated March 9, 2009 aggregating to `
2500 lakhs)
2,457.18 Issued at ` 2,441.80
lakhs, discount rate
10.00 % per annum
June 4, 2009
SIDBI (100 commercial paper of face value ` 491.44 Issued at ` 488.36 June 4, 2009
F-112
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
500,000 each dated March 9, 2009 aggregating to `
500 lakhs)
lakhs, discount rate
10.00 % per annum
Canara Bank ( 500 commercial paper of face value `
500,000 each dated March 6, 2009 aggregating to `
2,500 lakhs)
2,456.18 Issued at ` 2,438.37
lakhs, discount rate
10.25% per annum
June 4, 2009
IFCI (1,000 commercial paper of face value `
500,000 each dated March 20, 2009 aggregating to `
5,000 lakhs)
4,893.69 Issued at ` 4,877.33
lakhs, discount rate
10.20% per annum
June 18, 2009
LIC MF Floating Rate Fund (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount rate
10.75% per annum
September 14,
2009
LIC MF Income Plus Fund (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount rate
10.75% per annum
September 14,
2009
LIC MF Liquid Fund (1,000 commercial paper of
face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September 14,
2009
LIC MF Savings Plus Fund (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September 14,
2009
LIC MF Special Unit Scheme (1,000 commercial
paper of face value ` 500,000 each dated March 17,
2009 aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September 14,
2009
Total 49,024.50
Period 2008
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
UTI Mutual Funds - liquid cash plan (400 commercial
paper of face value ` 500,000 each dated February 20,
2008 aggregating to ` 2,000 lakhs)
1,973.16 Issued at `
1,950.70 lakhs,
discount rate
10.25% per annum
May 20, 2008
ABN Amro Money Plus Fund (1,000 commercial
paper of face value ` 500,000 each dated February 20,
2008 aggregating to ` 5,000 lakhs)
4,932.89 Issued at `
4,876.74 lakhs,
discount rate 10.25
% per annum
May 20, 2008
Religare Mutual Fund* (400 commercial paper of face
value ` 500,000 each dated February 20, 2008
aggregating to ` 2,000 lakhs)
1,973.16 Issued at `
1,950.70 lakhs,
discount rate 10.25
% per annum
May 20, 2008
Birla Sunlife Interval Income Fund Quarterly Plan
Series II (1,100 commercial paper of face value `
500,000 each dated February 20, 2008 aggregating to `
5,297.62 Issued at `
5,238.78 lakhs,
discount rate
August 20, 2008
F-113
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
5,500 lakhs) 10.00% per annum
Kotak Quarterly Interval Plan - Series 6 (500
commercial paper of face value ` 500,000 each dated
February 20, 2008 aggregating to ` 2,500 lakhs)
2,408.01 Issued at `
2,381.26 lakhs,
discount rate
9.20% per annum
August 20, 2008
Allahabad Bank (400 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
2,000 lakhs)
1,965.13 Issued at `
1,949.87 lakhs,
discount rate
10.20% per annum
June 4, 2008
Birla Cash Plus (900 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
4,500 lakhs)
4,421.54 Issued at `
4,387.21 lakhs,
discount rate
10.20% per annum
June 4, 2008
United Bank Of India (700 commercial paper of face
value ` 500,000 each dated March 4, 2008 aggregating
to ` 3,500 lakhs)
3,438.97 Issued at `
3,412.27 lakhs,
discount rate
10.20% per annum
June 4, 2008
UTI Spread Fund (500 commercial paper of face value
` 500,000 each dated March 4, 2008 aggregating to `
2,500 lakhs)
2,456.41 Issued at `
2,437.34 lakhs,
discount rate
10.20% per annum
June 4, 2008
Saraswat Co-op Bank Ltd. (200 commercial paper of
face value ` 500,000 each dated March 7, 2008
aggregating to ` 1,000 lakhs)
982.42 Issued at ` 975.55
lakhs, discount rate
10.28% per annum
June 4, 2008
SBI Life Insurance Co. Ltd. (500 commercial paper of
face value ` 500,000 each dated March 7, 2008
aggregating to ` 2,500 lakhs)
2,456.04 Issued at `
2,438.87 lakhs,
discount rate
10.28% per annum
June 4, 2008
Tata MF - Tata Fixed Horizon Fund (800 commercial
paper of face value ` 500,000 each dated March 7,
2008 aggregating to ` 4,000 lakhs)
3,928.19 Issued at `
3,900.14 lakhs,
discount rate
10.50% per annum
June 4, 2008
ABN Amro Flexible Short Term Plan - Series B (500
commercial paper of face value ` 500,000 each dated
March 7, 2008 aggregating to ` 2,500 lakhs)
2,455.16 Issued at `
2,437.59 lakhs,
discount rate
10.50% per annum
June 4, 2008
Total 38,688.70
* Religare Mutual Fund is Formerly known as Lotus India Mutual Fund
Notes:
Note 1: Secured by first pari passu charge on all fixed assets of the Parent Company.
Note 2: Cash credit is secured by deferred payment note, hypothecation of book-debts, moveable fixed assets and
stocks of chemicals.
F-114
Note 3: Secured against the motor cars acquired on Equitable Monthly Instalment (EMI) System.
Note 4: Secured by pari passu first charge on the inventories, book debts and other current assets of the Company.
Note 5: Secured by pari passu second charge of all the movable fixed assets and pari passu first charge on current
assets of the Company.
Note 6: Secured by pari passu first charge on goods, stocks, raw material finished goods, unfinished goods, book
debts and loans and advances i.e. current assets of the Company
Note 7: Secured by pari passu second charge on current assets and the moveable fixed assets of the Company.
Note 8: As per the terms of the issue document, the bonds were redeemable, in whole but not in part at the option of
the Company at any time on or after January 25, 2009 and on or prior to January 26, 2011 subject to certain
conditions at 121.679 per cent of the principal amount. During the current year the balance outstanding bonds were
redeemed.
Note 9: These loans have been guaranteed by Reliance Capital Limited.
Note 10: Secured by first pari passu charge on the all assets of the Parent Company and its Wholly owned Indian
subsidiaries.
Note 11: Secured by pari passu first charge of all the fixed assets, inventories, book debts and loans of advances of
subsidiary and Corporate guarantee of the Parent Company.
Note 12 : Secured by Standby Letter of credit issued by Parent Company for availing facility by subsidiary company
in foreign.
Note 13: Secured by the hypothecation of fixed assets purchased.
Note 14: Secured by second charge on current assets and fixed assets (including moveable and immovable) of the
Parent Company.
Note 15: Secured by first pari passu charge on the current assets and moveable fixed assets of the Company.
F-115
Annexure XVI
Reliance MediaWorks Limited
Statement of capitalisation of the Group
Pre-issue Post-issue
As at
Particulars September 30, 2012 As Adjusted for Issue*
Borrowings:
Short term borrowings 106,771.10
Long term borrowings (including ` 24,824.90 current
maturities) 100,493.27
Total borrowings 207,264.37 -
Shareholder's fund:
Share capital 2,453.81
Reserves and surplus (net) (excluding revaluation reserves) (60,603.61)
Less: Miscellaneous expenditures not written off -
Total shareholder's fund (58,149.80) -
Long term debt / Shareholder‟s fund NA
Notes : -
a) Short term borrowing represents amount repayable within one year from September 30, 2012
b) The figures disclosed above are based on the summary statement of assets and liabilities, as restated, of the
Company as at September 30, 2012
c) The corresponding post issue figures are not determinable at this stage pending the completion of the Rights issue
process and hence have not been furnished.
F-116
Annexure XVII
Reliance MediaWorks Limited
Statement of the dividend paid / proposed
(` in lakhs)
Class of shares
Face
Value of
share in
`
Period
2012
Period
2011 Period 2010 Period 2009 Period 2008
Equity shares
Equity shares capital as at
year end / period end 5
2,306.31
2,306.31
2,306.31 2,306.31 2,306.31
Total 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
Final dividend
Rate of the final dividend
(excluding dividend
distribution tax) - - - - 50.00%
Aggregating amount of
final dividend - - - - 1,153.20
F-117
Annexure XVIII
Reliance MediaWorks Limited
Statement of related party disclosures of the Group
(` in lakhs)
Parties where control exists
Holding Company
Reliance Capital Limited (up to November 30, 2007)
Reliance Land Private Limited (up to November 30, 2007)
Other related parties with whom transactions have taken place during the period
(a) Significant shareholders, key managerial personnel and their relatives
Manmohan Shetty (up to November 30, 2007)
Pooja Shetty (up to November 30, 2007)
Kirti Desai – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from January 30, 2008
till May 15, 2011)
Madhulika Singh – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from May 28,
2011 upto June 30, 2011)
Ashish Agarwal – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from July 1, 2011)
Reliance Land Private Limited (upto November 30, 2007)
(b) Enterprises over which company / key managerial personnel has significant influence / Associates
HPE / Adlabs LP.
Sultan Production Private Limited (up to March 31, 2009)
Gold Adlabs
Dharma Production Private Limited (up to November 30, 2007)
Idream Productions Private Limited (up to November 30, 2007)
Whistling Woods International Private Limited (up to November 30, 2007)
Reliance Communication Infrastructure Limited (up to November 30, 2007)
Reliance Capital Assets Management Limited (up to November 30, 2007)
Reliance Web Stores Limited (up to November 30, 2007)
Reliance General Insurance Company Limited (up to November 30, 2007)
M/s. Shringar Films (upto November 30, 2007)
South Yarra Holding (upto November 30, 2007)
Shringar Films Limited (upto November 30, 2007)
Adlabs Shringar Multiplex Cinemas Private Limited (upto November 30, 2007)
(c) Joint ventures
Cineplex Private Limited (upto June 3, 2011)
Swanston Multiplex Cinemas Private Limited
F-118
Divyashakti Marketing Private Limited
Adlabs Multiplex Limited (upto December 19, 2007)
Nature of
Transactions
Name of Related Party Holding Company
Period 2012 Period
2011 Period
2010
Period
2009
Period
2008
Dividend Paid
Reliance Land Private
Limited - - - - 515.00
Reliance Capital
Limited - - - - 31.38
Nature of
Transactions
Name of Related Party Significant Shareholders, key managerial personnel and their
relatives
Period 2012 Period
2011 Period
2010
Period
2009
Period
2008
Dividend Paid Manmohan Shetty - - - 57.30
Managerial
Remuneration
Kirti Desai 5.60 10.80 7.80 7.80 1.40
Madhulika Singh 0.80 - - - -
Ashish R. Agarwal 29.40 - - - -
Manmohan Shetty - - - - 116.10
Pooja Shetty - - - - 4.90
Loans given Kirti Desai - - 5.00 - -
Loans
received back Kirti Desai - - 5.00 - -
Nature of
Transactions
Name of Related
Party
Enterprises over which Company has significant influence /
associates
Period 2012 Period
2011 Period
2010
Period
2009
Period
2008
Reimbursement
of expenses
Sultan Production
Private Limited - - - (107.70) -
Income from
theatre operation Gold Adlabs 166.60 121.60 151.30 252.08 292.22
(Withdrawal) /
additional
contribution Gold Adlabs (189.90) (105.80) (130.l0) (278.31) (301.61)
Interest Income HPE / Adlabs LP - - - - 43.70
Repayment of
Principal by
Limited liability
Partnership HPE / Adlabs LP - - 241.70 - -
Loan Given
Sultan Production
Private Limited - - - 548.30 719.20
Outstanding
Balances as at
period end
Sultan Production
Private Limited - - - 1,159.70 719.20
F-119
Annexure XIX
Reliance MediaWorks Limited
Segment information of the Group
Particulars Film production services
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 28,638.40 24,726.90 16,060.40 13,498.00 6,647.70
Other income - 416.30 409.80 - 49.70
Net revenue 28,638.40 25,143.20 16,470.20 13,498.00 6,697.40
Internal segment sales (835.50) (1,877.70) (705.90) (441.00) (376.50)
Total segment revenue 27,802.90 23,265.50 15,764.30 13,057.00 6,320.90
Result ((loss) / profit before interest
and corporate expenses)
Segment result (13,312.94) (477.60) 3,067.42 3,538.96 2,306.70
Other Information
Segment assets 71,199.49 75,073.22 58,167.72 29,764.20 15,425.76
Segment liabilities 5,484.30 5,268.80 4,656.80 1,577.50 3,186.70
Net capital employed 65,715.19 69,804.42 53,510.92 28,186.70 12,239.06
Capital expenditure 3,786.50 16,464.20 23,533.80 4,810.90 7,514.61
Depreciation, amortisation and
impairment 9,346.80 4,870.00 2,189.28 1,049.84 330.50
Particulars Theatrical exhibition
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 86,275.00 51,424.60 47,620.80 34,169.84 12,238.64
Other income 41.51 3,300.40 14.80 - 330.30
Net revenue 86,316.51 54,725.00 47,635.60 34,169.84 12,568.94
Internal segment sales (9.00) (46.70) (910.80) (998.70) -
Total segment revenue 86,307.51 54,678.30 46,724.80 33,171.14 12,568.94
Result ((loss) / profit before interest
and corporate expenses)
Segment result (30,380.83) (10,398.60) (4,953.70) (4,545.60) 684.90
Other Information
F-120
Particulars Theatrical exhibition
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Segment assets 84,119.03 108,259.33 121,947.33 108,036.63 55,514.41
Segment liabilities 21,310.70 15,772.40 13,197.00 10,908.40 5,575.30
Net capital employed 62,808.33 92,486.93 108,750.33 97,128.23 49,939.11
Capital expenditure 2,488.60 5,860.10 18,905.70 36,854.70 16,980.33
Depreciation and amortisation and
impairment
11,732.00 8,241.80 7,140.70 3,509.60 1,152.00
Particulars Television / Film Production and Distribution
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 9,150.90 5,334.00 10,411.00 21,164.80 13,907.90
Other income 44.14 690.20 656.30 - 332.10
Net revenue 9,195.04 6,024.20 11,067.30 21,164.80 14,240.00
Internal segment sales - (353.70) (968.30) (1,457.60) (1,648.80)
Total segment revenue 9,195.04 5,670.50 10,099.00 19,707.20 12,591.20
Result ((loss) / profit before interest
and corporate expenses)
Segment result 1,965.80 1,150.00 4,011.00 3,187.33 (148.32)
Other Information
Segment assets 13,687.66 10,528.86 16,325.56 16,882.06 41,849.73
Segment liabilities 3,072.30 2,417.70 2,178.20 1,420.70 7,974.30
Net capital employed 10.615.36 8,111.16 14,147.36 15,461.36 33,875.43
Capital expenditure 23.10 19.20 483.20 - 7,512.90
Depreciation and amortisation and
impairment 38.60 49.00 280.00 8,915.87 8,647.50
Particulars Radio
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Other Information
Segment assets - - - - 45,061.80
Segment liabilities - - - - 7,021.90
F-121
Particulars Radio
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Net capital employed - - - - 38,039.90
Capital expenditure - - - - 19,195.02
Particulars Total
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 124,064.30 81,485.50 74,092.20 68,832.64 32,794.24
Other income 85.64 4,406.90 1,080.90 - 712.10
Net revenue 124,149.94 85,892.40 75,173.10 68,832.64 33,506.34
Internal segment sales (844.50) (2,278.10) (2,585.00) (2,897.30) (2,025.30)
Total segment revenue 123,305.44 83,614.30 72,588.10 65,935.34 31,481.04
Unallocated revenue 2,181.46 1,411.90 2,175.80 7,184.90 4,815.70
Total Revenue 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74
Result ((loss) / profit before interest
and corporate expenses)
Segment result (41,727.97) (9,726.20) 2,124.72 2,180.69 2,843.28
Unallocated corporate income 2,181.46 1,411.90 2,175.80 7,184.90 4,815.70
Unallocated corporate expenses (10,709.42) (6,598.56) (5,864.41) (3,860.56) (1,827.61)
(Loss) / profit before interest and tax (50,255.91) (14,912.86) (1,563.89) 5,505.03 5,831.37
Interest and finance charges (net (39,751.40) (17,514.20) (11,717.20) (12,447.20) (2,905.24)
Income tax (including deferred tax
and fringe benefit tax) (276.91) (586.63) (53.02) (543.36) (858.01)
Minority interest (732.40) 196.70 530.87 322.12 (53.80)
(Loss) / profit for the period (91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52
Other Information
Segment assets 169,006.18 193,861.41 196,440.61 154,682.89 157,851.70
Unallocated corporate assets 17,046.37 34,913.25 56,315.00 49,131.99 29,425.71
Total assets 186,052.55 228,774.66 252,755.61 203,814.88 187,277.41
Segment liabilities 29,867.30 23,458.90 20,032.00 13,906.60 23,758.20
Unallocated corporate liabilities 214,335.05 202,608.93 196,906.03 140,665.84 95,736.46
Total liabilities 244,202.35 226,067.83 216,938.03 154,572.44 119,494.66
Net capital employed (unallocated) (197,288.68) (167,695.68) (140,591.03) (91,533.85) (66,310.75)
Capital expenditure 6,298.20 22,343.50 42,922.70 41,665.60 51,202.86
Unallocated corporate capital
expenditure 51.90 58.70 168.60 186.30 74.28
Total capital expenditure 6,350.10 22,402.20 43,091.30 41,851.90 51,277.14
Depreciation and amortisation and
impairment 21,117.40 13,160.80 9,609.98 13,475.31 10,130.00
Unallocated depreciation and
amortisation and impairment 218.10 65.70 119.46 67.10 23.62
F-122
Particulars Total
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Total depreciation and amortisation
and impairment 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
India
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Segment Revenue 89,526.60 60,277.90 50,012.80 52,324.04 31,292.64
Segment Assets 160,714.52 200,866.76 227,050.71 178,966.78 186,167.11
Capital Expenditure 4,485.79 18,941.70 34,344.70 22,584.80 51,276.64
United States of America
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Segment Revenue 20,636.40 16,234.10 15,679.80 11,540.00 120.00
Segment Assets 19,239.10 14,093.80 13,294.80 12,385.10 654.40
Capital Expenditure 720.40 2,325.60 5,269.80 9,101.00 0.50
Malaysia
Period 2012 Period 2011 Period 2010 Period 2009
Segment Revenue 9,427.20 5,615.70 4,970.80 1,491.10
Segment Assets - 10,323.60 10,892.10 12,197.90
Capital Expenditure 405.90 617.50 1,702.50 10,081.00
Others
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Segment Revenue 3,715.20 1,486.60 1,924.70 580.20 68.40
Segment Assets 6,098.90 3,490.50 1,518.00 265.10 455.90
Capital Expenditure 737.90 517.40 1,774.30 85.10 -
Total
Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Segment Revenue 81,644.46 83,614.30 72,588.10 65,935.34 31,481.04
Segment Assets 186,052.55 228,774.66 252,755.61 203,814.88 187,277.41
Capital Expenditure 6,350.10 22,402.20 43,091.30 41,851.90 51,277.14
The Group has disclosed Business Segment as the primary segment.
The business of the Group is divided into three segments - Film production services, Theatrical exhibition and
Television / Film production and distribution. Segments have been identified taking into account the nature of the
business, the differing risks and returns, the organisation structure and internal reporting system. Film production
services operation primarily comprise of processing of raw exposed films, colour correction, editing, digital
processing, equipment / facility rental, copying and printing of positive exhibitions prints and trading in raw film
rolls. Theatrical exhibition operations comprise of single screen, multiplex / Imax cinema exhibition, range of
activities / services offered at cinema centres including catering food and beverages. Television / film production
and distribution comprises of production of television / film content which is produced / coproduced by the Group
F-123
and includes related services of financing for production of films. Film distribution operation comprises of the
Group‟s share of revenue from exploitation of distribution rights acquired by the Group, which may include as a
package, theatrical rights and video and television rights.
Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable
to each segment as also the amounts allocable on a reasonable basis. Income and expenses which are not directly
attributable to any business segment are shown as unallocated corporate income / expenses. Assets and liabilities
that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities
respectively.
Further, the Group has considered the overseas operations as a separately identifiable geographic segment due to
substantial operations in the United States of America and Malaysia. Hence, the Group has identified secondary
segments based on geographic locations and has reported India, Americas, Malaysia and Rest of world as
geographic segments.
Pursuant to the business restructuring exercise of Film production services, with effect from October 1, 2011,
animation business is no longer considered to be a part of this segment.
F-124
The Board of Directors
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
MUMBAI 400 065
March 11, 2013
Dear Sirs
1. We have examined the attached restated summary financial information of Reliance MediaWorks Limited
(„RMWL‟ or „the Company‟), as approved by the Board of Directors of the Company, prepared in terms of
the requirements of Paragraph B, Part II of Schedule II to the Companies Act, 1956 ('the Act'), the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009,
as amended to date, to the extent applicable („SEBI Regulations‟), the Guidance note on „Reports in
Company Prospectus (Revised)‟ issued by the Institute of Chartered Accountants of India („ICAI‟), to the
extent applicable („Guidance Note‟), and in terms of our engagement agreed upon with you in accordance
with our engagement letter dated February 20, 2013 in connection with the proposed Issue of Equity Shares
of the Company on a rights basis.
2. We have examined the attached Summary Statement of Assets and Liabilities, as restated, of the Company
as at September 30, 2012, March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008, the
attached Summary Statement of Profit and Loss, as restated, for the eighteen months ended September 30,
2012, year ended March 31, 2011, year ended March 31, 2010, year ended March 31, 2009 and nine
months ended March 31, 2008, and the attached Summary Statement of Cash Flow, as restated, for the
eighteen months ended September 30, 2012, for the year ended March 31, 2011, year ended March 31,
2010, year ended March 31, 2009 and nine months ended March 31, 2008, as set out in Annexure I,
Annexure II and Annexure III respectively, together referred to hereinafter as the „Restated Summary
Statements‟. These restated summary statements of RMWL have been prepared by the management from
the audited financial statements for the eighteen months ended September 30, 2012, for the year ended
March 31, 2011, year ended March 31, 2010, year ended March 31, 2009 and nine months ended March 31,
2008, being the last five financial years / periods for which the accounts of the Company have been made
up, and have been approved by the Board of Directors for the respective years / periods and adopted by the
Members of the Company. The financial statements of the Company as at and for the year ended March
31, 2009 and nine months ended March 31, 2008 have been audited by one of the joint auditors, B S R &
Co., Chartered Accountants. The financial statements as at and for the eighteen months ended September
30, 2012 and the financial statements as at and for the year ended March 31, 2011 and year ended March
31, 2010 have been audited by us. The restated summary statements have been prepared in line with
General Circular No. 62/2011 F No. 17/244/2011-CL-V, dated September 5, 2011 issued by Ministry of
Corporate Affairs, Government of India.
3. Without qualifying our report, we draw attention to the following
a. As set out in paragraph (a) of Note C of Annexure IV to this report, the Company‟s net worth is
fully eroded (restated) and has a negative net worth of ` 20,451.53 lakh, and the Company has
incurred a loss of ` 70,356.34 lakh (as restated) for the eighteen months period April 1, 2011 to
September 30, 2012, indicating the existence of uncertainty that may cast doubt about the
Company‟s ability to continue as a going concern. Considering the matters set out in the said
note, this Restated Summary Statement is prepared on a going concern basis.
b. As set out in paragraph (e)(i) of Note C of Annexure IV, during the nine months period ended
March 31, 2008, the Hon‟ble High Court of Judicature at Bombay vide its order dated March 7,
2008 sanctioned the Modified Composite Scheme of Amalgamation and Arrangement („Modified
F-125
Scheme‟) for modification of the Composite Scheme. The Modified Scheme was filed with the
ROC on March 31, 2008. The Modified Scheme inter-alia provides that the net results of the
transactions related to the radio business of the Company for the period from March 31, 2006 to
the Effective Date (i.e. the date of filing the Modified Scheme with the ROC, March 31, 2008) be
adjusted in the General reserve account of the Company. The Composite Scheme was given effect
to in accordance with the accounting treatment prescribed by the said Scheme in the financial
statements for the fifteen months ended June 30, 2007 and, only the modifications to the original
scheme were given effect to in the financial statements for the nine months ended March 31, 2008.
c. As set out in paragraph (d)(ii) of Note C and point 2 of paragraph IV of Note D of Annexure IV,
during the year ended March 31, 2009, the Hon‟ble High Court of Judicature at Mumbai vide its
order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company with its wholly
owned subsidiaries Adlabs Multiplex and Theatres Limited, Adlabs Multiplex Limited, Rave
Entertainment Private Limited and Mahimna Entertainment Private Limited („Amalgamation
Scheme‟), under sections 391 to 394 of the Act. Pursuant to the said Amalgamation Scheme, the
Company has recorded an increase in value of assets aggregating ` 17,890.10 lakhs by crediting
the Capital reserve. Further, the Company has recorded an adjustment for diminution in value of
its assets (production and distribution rights, fixed assets, investments, debtors and loans and
advances) aggregating ` 15,669.60 lakhs by debiting the same to Capital reserve instead of the
profit and loss account, had the Company debited the profit and loss account, the loss before tax
for the year would be higher by the said amount.
4. In accordance with the requirements of Paragraph B, Part II of Schedule II of the Act, the SEBI
Regulations, the Guidance Note and in accordance with the terms of our engagement agreed with you, and
read with paragraphs 2 above and with regards to adjustments for matters of emphasis in the Auditors‟
report as stated in paragraph 3 above, we confirm/ further report that the Restated Summary Statements
examined by us and as set out in Annexure I, Annexure II and Annexure III to this report are prepared after
making adjustments and regrouping as in our opinion were appropriate and as are more fully described in
significant accounting policies and notes to the Restated Summary Statements enclosed as Annexure IV to
this report.
5. Based on the above, read with the matters stated in paragraphs 2 above and with regards to adjustments for
matters of emphasis in the Auditors‟ report as stated in paragraph 3 above , we are of the opinion that the
restated financial information have been made after incorporating:
i. Adjustments for the changes in accounting policies adopted by the Company retrospectively in
respective financial years / periods to reflect the same accounting treatment as per changed
accounting policy for all the reporting periods;
ii. Adjustments for material amounts in the respective financial years / periods to which they relate;
and
iii. There are no extraordinary items that need to be disclosed separately in the Restated Summary
Statements.
iv. Adjustments for qualifications, as applicable in the Auditors‟ reports in the respective years/
periods to which they relate.
6. We have also examined the following other restated financial information set out in the Annexures
prepared by the management and approved by the Board of Directors, relating to the Restated Summary
Statements and annexed to this report:
a. Statement of share capital, enclosed as Annexure V
b. Summary statement of reserves and surplus, enclosed as Annexure VI
c. Statement of non-current investment, deferred tax assets (net), long-term loans and advances and
other non-current assets, enclosed as Annexure VII
d. Statement of current assets, enclosed as Annexure VIII
e. Statement of non-current liabilities, enclosed as Annexure IX
f. Statement of current liabilities, enclosed as Annexure X
F-126
g. Statement of revenue, enclosed as Annexure XI
h. Statement of other income, enclosed as Annexure XII
i. Statement of contingent liabilities and commitments, enclosed as Annexure XIII
j. Statement of accounting ratios, enclosed as Annexure XIV
k. Statement of principal terms and conditions of long-term borrowings and short-term borrowings,
enclosed as Annexure XV
l. Statement of capitalization as at September 30, 2012, enclosed as Annexure XVI
m. Statement of dividend paid/ proposed, enclosed as Annexure XVII
n. Statement of related party disclosures, enclosed as Annexure XVIII
o. Statement of tax shelter, enclosed as Annexure XIX
7. In our opinion, the Restated Summary Statements contained in Annexure I, Annexure II and Annexure III
to this report, read with the significant accounting policies and notes disclosed in Annexure IV, and other
restated financial information contained in Annexure V to Annexure XIX to this report, and read with
paragraphs 2 and 3 above and note 3 disclosed in Annexure VII and Annexure VIII respectively, have been
prepared in accordance with Paragraph B, Part II of Schedule II of the Act and the SEBI Regulations.
8. The report should not in any way be construed as a reissuance or redating of any of the previous audit
reports issued by us or by the other firm of Chartered Accountants, nor should this report be construed as a
new opinion on any financial statements referred to herein.
9. We have no responsibility to update our report for events and circumstances occurring after the date of this
report.
10. This report is intended solely for use of the management and for inclusion in the Offer Document in
connection with the proposed issue of equity shares of the Company on a rights basis, and is not to be used,
referred to or distributed for any other purpose without our prior written consent.
For B S R & Co.
Chartered Accountants
Firm‟s Registration No: 101248W
For Chaturvedi & Shah
Chartered Accountants
Firm‟s Registration No: 101720W
Bhavesh Dhupelia
Partner
Membership No: 042070
Mumbai
March 11, 2013
Parag D. Mehta
Partner
Membership No: 113904
Mumbai
March 11, 2013
F-127
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A
Non-current assets
I Fixed assets
(i) Tangible assets 75,331.83 85,631.03 84,424.23 66,359.33 34,799.90
(ii) Intangible assets 722.20 418.10 184.60 219.00 18,206.10
(iii) Capital work-in-
progress 11,966.60 13,812.70 16,132.50 16,863.20 21,331.01
(iv) Intangible assets under
development - - - - -
II Non-current investments 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45
III Deferred tax assets (net) - - - - -
IV Long-term loans and
advances 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13
V Other non-current assets 62.00 290.30 277.42 59.41 43.75
128,722.57 134,746.13 132,017.01 109,704.98 114,257.34
B Current assets
I Current investments - - 7,902.40 - 13,500.30
II Inventories 658.50 724.50 596.80 518.30 191.80
III Trade receivables 16,179.40 18,741.90 22,119.10 20,202.40 11,640.10
IV Cash and bank balances 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29
V Short-term loans and
advances 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
VI Other current assets 717.60 4,265.20 2,765.47 4,281.48 3,911.16
79,766.60 94,307.00 108,369.43 79,887.31 67,886.33
Liabilities
C Non-current liabilities
I Long-term borrowings 71,412.50 39,870.80 36,416.70 54,230.00 53,099.90
II Deferred tax liabilities (net) - - - - -
III Other long-term liabilities 3,636.70 2,934.69 1,822.66 839.10 342.98
IV Long-term provisions 501.10 695.90 344.50 3,427.40 3,038.34
75,550.30 43,501.39 38,583.86 58,496.50 56,481.22
D Current liabilities
I Short-term borrowings 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60
II Trade payables 12,646.50 10,489.20 7,308.80 5,162.10 8,245.66
III Other current liabilities 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46
IV Short-term provisions 94.00 125.40 31.80 29.30 1,800.65
F-128
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
153,390.40 168,745.58 160,332.22 79,986.13 59,021.37
E Net Worth (A+B-C-D) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
F Represented by
i) Share capital 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and surplus (net) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
G Net Worth (i+ ii) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
Note :
The above statement should be read with significant accounting policies and notes to summary statement of assets
and liabilities of the Company, as restated (Annexure IV)
F-129
Annexure II
Reliance MediaWorks Limited
Summary statement of profit and loss of the Company, as restated
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue from operations 76,129.30 48,669.20 45,551.99 48,234.34 26,894.71
Other income 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30
Total revenue 80,454.80 54,287.40 48,625.19 54,882.24 32,280.01
Direct operational expenses 30,064.14 20,449.70 15,631.90 15,752.90 7,585.30
Employee benefits expense 13,856.10 9,882.50 5,969.20 5,645.80 2,272.80
Finance costs (including loss on
derivative contracts) (net) 39,061.20 16,973.30 11,306.60 12,363.70 2,751.34
Depreciation, amortisation and
impairment expense
10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Other expenses 49,813.10 24,594.80 18,427.09 13,743.54 7,150.27
Total expenses 143,583.94 78,635.40 57,422.19 59,802.55 29,730.75
(Loss) / profit before tax and
exceptional items (63,129.14) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Exceptional items (Refer note 7
of I of D of Annexure IV) (7,227.20) - - - -
(Loss) / profit before tax (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Less - Provision for taxes
- Deferred tax charge / (credit) - - - (134.80) 621.40
- Fringe benefit tax - - - 151.50 71.49
Net (loss)/ profit after tax
(Balance carried to Annexure
VI) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
The above statement should be read with significant accounting policies and notes to summary statement of profit
and loss of the Company, as restated (Annexure IV)
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F-130
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
A Cash Flow from operating
activities
Net (loss) / profit before tax,
as restated (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Adjustment for
Depreciation and
amortisation expense 10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Bad debts / advances written-
off 103.60 107.30 50.50 263.00 385.10
Provision for doubtful debts
and advances 8,977.20 1,658.20 121.90 - -
Provision for diminution in
value of non-current
investments 825.10 - - - -
Sundry balances written-off 981.50 - - - -
Capital work-in-progress
written-off 4,424.60
Dividend income (200.40) - (85.30) (205.40) (148.80)
Interest income (1,080.10) (773.20) (406.40) (716.70) (831.50)
Profit on derivative contract - - - - (977.40)
Loss / (profit) on sale /
discarding of fixed assets
(net) 674.20 (2,701.10) 40.80 4.40 56.50
Gain on sale of non-current
investments (766.50) - - - -
Gain on sale of current
investments (39.50) (423.60) (274.40) (269.20) (9.10)
Gain on sale of non-current
investments - - - (1,700.00) (2,660.30)
Provisions written back - - (241.70) - -
Unrealised foreign exchange
(gain) / loss (2,588.50) (305.30) 2,000.20 (807.20) (18.10)
Finance costs (including loss
on derivative contracts) (net) 39,061.20 16,973.30
11,306.60
12,363.70
2,751.34
Operating (loss) / profit
before working (9,194.54) (3,077.30) 9,802.60 16,308.90 11,068.04
F-131
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
capital changes and before
net results of Radio
business
Adjustment for cash loss
pertaining to transaction
relating to Radio business up
to March 31, 2008 pursuant
to Modified Composite
Scheme of Amalgamation
and Arrangement - - - - (8,377.00)
Operating (loss) / profit
before working capital
changes (9,194.54) (3,077.30) 9,802.60 16,308.90 2,691.04
Adjustment for :
Decrease / (Increase) / in
trade receivables 515.90 2,749.20 (2,008.60) (17,317.60) (7,582.14)
Decrease / (increase) in loans
and advances and other assets 3,918.50 (5,484.91) (1,978.10) (6,541.45) (5,773.14)
Decrease / (increase) in
inventories 66.00 (127.70) (78.50) (325.40) (30.30)
Increase / (decrease) in trade
and other payables 2,393.56 4,988.71 4,863.50 (4,444.30) 9,061.70
Cash generated from / (used
in) from operating activities (2,300.58) (952.00) 10,600.90 (12,319.85) (1,632.84)
Taxes paid (net of refunds) 1,790.10 1,693.00 (1,122.00) (1,544.50) (1,346.80)
Net cash generated from /
(used in) operating
activities (A) (510.48) 741.00 9,478.90 (13,864.35) (2,979.64)
B
Cash flow from investing
activities
Purchase of fixed assets
(5,183.50)
(15,372.10)
(24,733.56)
(21,363.60)
(46,194.40)
Proceeds from sale of fixed
assets 762.40 13,986.70 10.80 1,087.60 12.10
Proceeds on sale of non-
current investments 1,233.62 1.00 4,066.80 3,127.30 -
Loan to subsidiaries and joint
ventures (net) (1,721.70) (13,597.70) (21,195.70) - -
Purchase of non-current
investment - in shares of
subsidiaries companies / joint (12,127.00) (2,000.00) (3,005.00) (201.80) (2,720.80)
F-132
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
venture/ associates (Refer
Note 2)
Advance for application
money towards subscription
of shares in a joint venture - - (125.00) - -
Repayment of capital by
Partnership firm - - 241.70 - -
Purchase of non-current
investments – other - - (9.90) (4.50) (0.40)
Profit from / investment in
mutual funds (net) 39.50 423.60 274.40 269.20 9.10
Redemption of / (investment
in) mutual funds - 7,902.40 (7,902.40) 13,500.30 (13,480.50)
Dividend income
Interest income
200.40
1,232.00
-
685.90
85.30
425.60
205.40
1,395.40
148.80
238.40
Cash generated from / (used
in) investing activities (15,564.28) (7,970.20) (51,866.96) (1,984.70) (61,987.69)
Taxed paid (net of refunds) (47.30) (17.00) (26.70) (78.10) (194.40)
Net Cash generated from /
(used in) investing activities
(B) (15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)
C Cash flow from financing
activities
Proceeds from long-term
borrowings 66,900.00 37,500.00 3,500.00 - 40,000.00
Proceeds from short-term
borrowings (net) (Refer note
3 below) 4,053.20 2,598.10 54,539.70 31,250.80 28,845.30
Proceeds from issue of
Preference Shares (Refer note
3 below) 29,500.00 - - - -
Repayment of Foreign
currency convertible bonds - (15,814.50) - - -
Repayment of long-term
borrowings (61,020.80) (17,083.30) - - -
Profit on derivative contract - - - - 977.40
Interest recoverable from - (1,448.60) (2,507.89) (2,584.90) -
F-133
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
Reliance Broadcast Network
Limited
Recovered from Reliance
Broadcast Network Limited
pursuant to Scheme of
Arrangement 9,961.40 20,000.00 - - -
Dividend (including dividend
distribution tax) paid - - - (1,349.20) (1,164.10)
Finance costs (including loss
on derivative contracts) (net) (34,561.34) (16,757.90) (13,034.60) (11,201.60) (4,795.30)
Net cash flow (used in) /
generated from financing
activities ( C ) 14,832.46 8,993.80 42,497.21 16,115.10 63,863.30
Net increase in cash and
cash equivalent (A+B+C) (1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Cash and cash equivalents as
at beginning of the period 3,201.10 1,453.50 1,371.05 1,989.10 1,987.53
Cash and cash equivalents
adjusted pursuant to
Composite Scheme of
Amalgamation and
Arrangement - - - 37.70 1,300.00
Cash and cash equivalents
adjusted pursuant to Modified
Composite Scheme of
Amalgamation and
Arrangement - - - (843.70) -
Cash and cash equivalents
as at end of the period
(refer note (I) (II) D of
Annexure VIII) 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10
(1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Note :
1. The above cash flow statement has been prepared under the "Indirect Method" as set out in Accounting
Standard 3 - Cash Flow Statement
2. During Period 2012, the Company has apportioned loan given to a subsidiary into preference shares
amounting to ` 12,000 lakhs
3. During Period 2012, the Company has apportioned the loans received on a short term basis into preference
shares amounting to ` 29,500 lakhs
The above statement should be read with significant accounting policies and notes to summary statement of cash
flow of the Company, as restated (Annexure IV)
Period 2012 - Eighteen months ended September 30, 2012
F-134
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
2012 Period 2011 Period 2010 Period 2009 Period 2008
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F-135
Annexure IV
Reliance MediaWorks Limited
Significant accounting policies and notes to the restated summary statements
The figures for Period 2012 represents the eighteen months ended September 30, 2012, Period 2011 represents the year
ended March 31, 2011, Period 2010 represents the year ended March 31, 2010, Period 2009 represents the year ended
March 31, 2009 and Period 2008 represents the nine months ended March 31, 2008. Summary statements are not strictly
comparable on account of accounting pursuant to Court approved Schemes in Period 2008 and Period 2009. Also, the
summary statements are not comparable on account of varying accounting periods forming part of them.
The restated summary statements have been prepared to comply in all material respects with the requirements of Schedule
II to the Companies Act, 1956 (“the Act”) read with the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on August 26, 2009, as amended,
to the extent applicable.
A. Summary of significant accounting policies
1. Basis of preparation
These summary statements are prepared and presented under the historical cost convention on the accrual basis
of accounting except for revaluation of certain fixed assets and in accordance with the Accounting Standards
(„AS‟) notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the
Companies Act, 1956 („the Act‟), to the extent applicable. The summary statements are presented in Indian
Rupees in lakhs except per share data and where mentioned otherwise.
Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011 (as
amended by notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no.
62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised Schedule VI notified
under the Act has become applicable to the Company for the purpose of preparation and presentation of its
summary statements. The adoption of revised Schedule VI does not impact the recognition and measurement
principles followed for preparation of summary statements. All assets and liabilities have been classified as
current or non-current as per the Company‟s normal operating cycle and other criteria set out in the revised
Schedule VI.
The restated summary statements of Company have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on
August 26, 2009, as amended, to the extent applicable.
2. Use of estimates
The preparation of summary statements of the Company in conformity with generally accepted accounting
principles („GAAP‟) in India requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosures of contingent liabilities on the date of the summary statements
and the reported amount of income and expenses during the reported period. The estimates and assumptions
used in the accompanying financial statements are based upon management‟s evaluation of relevant facts and
circumstances as at the date of the financial statements, which in its opinion are prudent and reasonable. Actual
F-136
results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in
current and future periods.
3. Fixed assets and depreciation / amortisation
a. Tangible assets
Tangible fixed assets are stated at cost and / or revalued amount in accordance with scheme of amalgamation
less accumulated depreciation and any provision for impairment. Cost includes freight, duties, taxes (other than
those recoverable from tax authorities) and other expenses related directly / indirectly to the acquisition /
construction and installation of the fixed assets for bringing the asset to its working condition for its intended
use.
Depreciation on fixed assets is provided on the straight line method, at the rates prescribed in Schedule XIV to
the Act, which, in management‟s opinion, reflects the estimated useful lives of those fixed assets, except in case
of following assets of theatrical exhibition segment wherein depreciation is provided at following rates:
Leasehold improvements / buildings are depreciated over the lower of the useful life of the asset and the lease
term, on a straight line basis.
Individual assets costing up to ` 0.05 lakhs are depreciated fully in the year of acquisition.
b. Intangible assets
Intangible assets, all of which have been acquired / created and are controlled through custody or legal rights,
are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are regarded
as having a limited useful economic life and the cost is amortised over the lower of useful life and ten years.
Application software purchased, which is not an integral part of the related hardware, is shown as intangible
assets and amortised on a straight line basis over its useful life, not exceeding five / ten years, as determined by
management.
Film rights comprise negative rights and distribution rights in films and are for a contractually specified mode
of exploitation, period and territory and are stated at cost less accumulated amortisation. Cost of film rights
comprises original purchase price / minimum guarantee. Cost is ascertained on specific identification basis
where possible. In case multiple films / rights are acquired for a consolidated amount, cost is allocated to each
film / right based on management‟s best estimates.
The individual film forecast method is used to amortise the cost of film rights acquired. Under this method,
costs are amortised in the proportion that gross revenues realised bear to management‟s estimate of the total
Particulars of fixed assets
Rate of depreciation
Plant and machinery 10%
Office equipment 10%
Furniture and fixture 10%
Computers 20%
Vehicles 10%
F-137
gross revenues expected to be received. If estimates of the total revenues and other events or changes in
circumstances indicate that the realisable value of a right is less than its unamortised cost, a loss is recognised
for the excess of unamortised cost over the film right‟s realisable value.
In respect of unreleased films, payments towards film rights are classified under capital advances as the
amounts are refundable in the event of non‑release of the film.
Purchased goodwill is recognised by the Company on the basis of excess of purchase consideration paid over
the value of the assets acquired at the time of acquisition and is amortised over its estimated useful life not
exceeding ten years.
4. Impairment
In accordance with AS 28 – „Impairment of Assets‟, where there is an indication of impairment of the
Company‟s asset, the carrying amounts of the Company‟s assets are reviewed at each balance sheet date to
determine whether there is any impairment. The recoverable amount of the asset (or where applicable, that of
the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its
value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating
unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss.
If at the balance sheet date there is an indicator that a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of
the depreciated historical cost.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the
asset and from its disposal at the end of its useful life.
5. Investments
Long-term investments are carried at cost. A provision for diminution is made to recognise a decline, other than
temporary, in the value of long-term investments and is determined separately for each individual investment.
Current investments are carried at lower of cost and fair value.
6. Inventories
Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon lamps and stores and
spares related to theatrical exhibition / film production services business etc.) are stated at the lower of cost and
net realisable value. Cost is determined on the first-in first out (FIFO) basis.
7. Employee benefits
Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term
employee benefits. The undiscounted amount of short term employee benefits expected to be paid in exchange
for the services rendered by employees are recognised as an expense during the period.
Long term employee benefits:
F-138
Provident fund and other schemes
The Company‟s state governed provident fund scheme, employee state insurance scheme and labour welfare
fund are defined contribution plans. The contribution paid / payable under the schemes is recognised during the
period in which the employee renders the related service.
Gratuity Plan
The Company‟s gratuity benefit scheme is a defined benefit plan. The Company‟s net obligation in respect of
the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior period; that benefit is discounted to determine its present value
and the fair value of any plan assets is deducted.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuation
using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for
determining the present value of the obligation under defined benefit plan, are based on the market yields on
Government securities as at the balance sheet date.
Actuarial gains and losses are recognised immediately in the statement of profit and loss.
Other Long term employment benefits:
Compensated absences which are not expected to occur within twelve months after the end of the period in
which the employee renders the related services are recognised as a liability at the present value of the defined
benefit obligation at the balance sheet date, determined based on actuarial valuation using Projected Unit Credit
Method. The discount rates used for determining the present value of the obligation under defined benefit plan,
are based on the market yields on Government securities as at the balance sheet date.
8. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured. The amount recognised as revenue is exclusive of value added tax,
service tax and net of trade discounts.
Amount of entertainment tax is shown as a reduction from revenue.
Film production services
Revenue from processing / printing of cinematographic films is recognised upon completion of the related
processing / printing.
Revenue from processing of digital content is recognised using the proportionate completion method. Use of the
proportionate completion method requires the Company to estimate the efforts expended to date as a proportion
F-139
of the total efforts to be expended. Efforts expended have been used to measure progress towards completion, as
there is a direct relationship between efforts expended and contracted output.
Sale of traded goods is recognised when the risks and rewards of ownership are passed on to the customer,
which generally coincides with the dispatch of goods.
Income from equipment / facility rental is recognised over the period of the relevant agreement / arrangement.
Theatrical exhibition and related income
Sale of tickets
Revenue from theatrical exhibition is recognised on the date of the exhibition of the films and comprises
proceeds from sale of tickets, gross of entertainment taxes. As the Company is the primary obligor with respect
to exhibition activities, the share of distributors in these proceeds is separately disclosed as distributors‟ share.
Amount of entertainment tax is shown as a reduction from revenue.
Sale of food and beverages
Revenue from sale of food and beverages is recognised upon sale and delivery at the counter.
Advertisement / sponsorship revenue
Revenue from advertisements, sponsorship and events is recognised on the date of the exhibition of the
advertisement / event, over the period of the contract or on completion of the Company‟s obligations, as
applicable.
Film production, distribution and related income
Film production and related income
Revenue from sale of content / motion pictures is accounted for on the date of agreement to assign / sell the
rights in the concerned motion picture / content or on the date of release of the content / motion picture,
whichever is later.
Income from film distribution activity
In case of distribution rights of motion pictures / content, revenue is recognised on the date of release /
exhibition.
Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is recognised
on the date when the rights are made available to the assignee for exploitation.
Revenue from sale of VCDs / DVDs, etc is recognised when the risks and rewards of ownership are passed on
to the customer, which generally coincides with the dispatch of the products.
Interest income / income from film financing
Interest income, including from film / content related production financing, is recognised on a time proportion
basis at the rate implicit in the transaction.
F-140
Dividend income
Dividend income is recognised when the right to receive dividend is unconditional at the balance sheet date.
Marketing rights / Rights to profit
Amounts received in lieu of future marketing rights sale, right to future profit from business of the Company
and other rights are recognised as income in the period of entering into the contract.
9. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the
transactions. Exchange differences arising on foreign exchange transactions settled during the period are
recognised in the statement of profit and loss of the period.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at
the closing exchange rates on that date; the resultant exchange differences are recognised in the statement of
profit and loss except in case of exchange differences arising on translation of monetary items which form part
of Company‟s net investment in a non-integral foreign operation which is accumulated in a „Foreign currency
translation reserve‟ until its disposal.
Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction.
Forward contracts are entered into to hedge the foreign currency risk of the underlying transaction. The
premium or discount on all such contracts arising at the inception of each contract is amortised as income or
expense over the life of the contract. Exchange differences on forward contracts are recognised as income or
expense in the statement of profit and loss of the period. Any profit or loss arising on the cancellation and
renewal of forward contract are recognised as income or expense for the period.
10. Earnings per share
In determining earning per share, the Company considers the net result after tax and includes the post tax effect
of any extraordinary / exceptional item. The number of shares used in computing basic earnings per share is the
weighted average number of shares outstanding during the period. The number of shares used in computing
diluted earnings per share comprises the weighted average number of shares considered for deriving basic
earnings per share and also the weighted average number of shares that could have been issued on the
conversion of all dilutive potential equity shares unless the results would be anti - dilutive. Dilutive potential
equity shares are deemed converted as of the beginning of the period, unless issued at a later date.
11. Taxation
Income-tax expense comprises current tax expense and fringe benefit tax computed in accordance with the
relevant provisions of the Income tax Act, 1961 and deferred tax charge or credit.
Current tax provision is made based on the tax liability computed after considering tax allowances and
exemptions, in accordance with the Income tax Act, 1961. Deferred tax charge or credit and the corresponding
deferred tax liability or asset is recognised for timing differences between the profits / losses offered for income
tax and profits / losses as per the summary statements. Deferred tax assets and liabilities are measured using the
tax rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.
F-141
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised
in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred
tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are
reviewed as at each Balance sheet date and written down / up to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
Provision for fringe benefit tax was made on the basis of applicable rates on the taxable value of eligible
expenses of the Company as prescribed under the Income Tax Act, 1961 till Period 2009 on the basis of
applicability.
12. Share issue / Foreign Currency Convertible Bonds (FCCB) issue expenses and premium on redemption.
Share / FCCB issue expenses incurred and premium payable on FCCB are adjusted in the period of issue
against the Securities premium reserve.
13. Provisions and contingencies
Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Company
recognises that it has a present obligation as a result of past events, it is more likely than not that an outflow of
resources will be required to settle the obligation and the amount can be reasonably estimated.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not require an outflow of resources. When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
made.
Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is
probable that a liability has been incurred and the amount can be reasonably estimated.
14. Leases
Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases are recorded on a
straight line basis over the lease term.
15. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are
capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period
of time to get ready for its intended use. All other borrowing costs are charged to revenue.
16. Commercial papers
Commercial papers are recognised as a liability at the amount of cash received at the time of issuance i.e.
discounted value. The discount is amortised as interest cost over the period of the commercial paper at the rate
implicit in the transaction.
F-142
B. Significant changes in accounting policies and other adjustments credited / (debited) to the restated summary statements:
(` in lakhs)
Particulars Refer
Note
Below
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment to balance
at the beginning in the
statement of profit and
loss as at July 1, 2007
(Loss) / profit after tax as per audited
financial statements (70,356.34) (25,621.00) (10,437.00) (2,972.60) 4,590.50
Balances as per audited financial
statements 8,794.79
Adjusted for
Change in depreciation method (a) - - - (834.31) 370.57 463.74
Change in estimated useful life (b) - - - -
- (218.77)
Restatement of FCCB‟s (c) - 1,272.40 1,718.10 (1,130.10) (1,860.40) -
Excess / (short) provision for tax (d) - 0.60 (78.10) -
(1.70) 79.20
Excess / (short) Minimum alternative tax (d) - - - -
(1,242.60) 1,242.60
Net impact of all adjustments
- 1,273.00 1,640.00 (1,964.41) (2,734.13) 1,566.77
Loss / (profit) after tax as restated
(70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
Balance of statement of profit and loss as
on July 1, 2007, as restated 10,361.56
F-143
a) Change in accounting policy for depreciation
During Period 2009, the Company has charged depreciation as per the written down value method in the
film production services, production and distribution business and for unallocated assets at the rates
specified in Schedule XIV of the Companies Act, 1956 till March 31, 2008. Starting April 1, 2008, the
Company has changed its policy to charge depreciation as per the straight line method at the rates specified
in Schedule XIV of the Companies Act, 1956. Accordingly, depreciation charge for the previous period‟s
has been restated based on the new method and the impact of change in depreciation method for the period
prior to July 1, 2007 has been adjusted to opening balance of the surplus in statement of profit and loss, as
restated as on July 1, 2007.
b) Change in estimated useful life of assets
The Company had revised the estimated useful lives of certain fixed assets pertaining to the theatrical
exhibition business from July 1, 2007, since in the opinion of the management, the revised useful life
reflect the estimated period of economic benefit to be derived from the use of such assets. For the purpose
of these summary statements, depreciation has been recomputed based on revised useful life of the assets
from the date of capitalisation of these assets. Accordingly depreciation for the periods prior to July 1, 2007
has been restated and depreciation for these periods has been adjusted to opening balance of the surplus in
statement of profit and loss, as restated as on July 1, 2007.
c) Accounting for Foreign Currency Convertible Bonds („FCCB‟)
During Period 2008, the liability for FCCB‟s had been reclassified as a non-monetary liability inter-alia on
the basis of the trend of earnings, movement of the Company‟s share prices and conversion option
exercised by the FCCB holders (bondholders holding 75.42% of the FCCB had exercised conversion option
as of March 31, 2008). However, during Period 2011, the balance FCCB‟s were redeemed at a premium, as
per the terms of the issue document.
The Company had reversed foreign exchange fluctuation loss aggregating to ` 438.06 lakhs in Period 2008
based on the consideration of FCCB‟s as a non-monetary liability. This position was carried forward till
Period 2010 and was a matter of emphasis referred to in the auditor‟s report for Period 2008, 2009 and
2010.
Hence, the Company has reversed the reversal made during Period 2008 and recognised the loss / gain on
the non-converted portion of FCCB‟s, considering them as a monetary item in Period 2008, 2009 and 2010
and reversed this loss in Period 2011, wherein the Company had recognised the entire loss on redemption
in its audited financial statements.
d) Tax impact on restatement
The statement of profit and loss of some period‟s include amounts paid / provided for or refunded / written
back, in respect of shortfall / excess income tax (including fringe benefit tax, wealth tax and MAT credit
entitlement) arising out of assessments, appeals etc. which has now been adjusted in the respective Period‟s
tax liability. Also, income tax (current tax and deferred tax) has been computed on adjustments made and
has been adjusted accordingly in the statement of profit and loss, as restated for the respective periods.
F-144
e) Consequent to the notification of the Companies (Accounting Standards) Rules, 2006, with effect from July
1, 2007, the Company adopted Accounting Standard (AS 15) - Employee Benefits. However, there was no
significant impact on adoption of the Standard which is required to be adjusted to the opening balance of
reserves and surplus.
f) Adjustments have been made in the Restated Summary Statements, wherever required, by a reclassification
of the corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the
groupings as per the audited financials of the Company for Period 2012 as prepared under Government
Notification no. S.O. 447 (E) dated February 28, 2011 (as amended by notification no. F.No/2/6/2008-CL-
V dated March 30, 2011), read with General Circular no. 62/2011 dated September 5, 2011, issued by the
Ministry of Company Affairs.
g) The Company in Period 2009 has classified its operations in US and in Period 2010 its operations in Nepal
as non-integral to the operations of the Parent Company in India. The impact of this change is not material
on the results of respective periods and hence, no restatement has been made for the same.
h) De-merger of Radio business
During the year ended March 31, 2006, the Company commenced operation of the Radio business. The
Company was granted 45 FM Radio operation licenses in various parts of India including all metros.
During the fifteen month period ended June 20, 2007, the Board of Directors of the Company, members of
the Company and the Hon‟ble High Court of Judicature at Bombay approved the Composite Scheme of
Amalgamation and Arrangement („Composite Scheme‟) which among other things provided for demerger
of the Radio business of the Company to Reliance Broadcast Network Limited with effect from April 1,
2006. The Company had given the in-principle effect of the Composite Scheme including the demerger of
the Radio business of the Company to Reliance Broadcast Network Limited in the accounts for the fifteen
month period ended June 30, 2007, pending filing of the Composite Scheme with the Registrar of
Companies. Subsequently, due to non-receipt of approval from the Ministry of Information and
Broadcasting, the Company filed the Modified Composite Scheme of Amalgamation and Arrangement (the
„Modified Composite Scheme‟) which provided for reversal of the effect of demerger, of the Radio
business that was given effect to in the accounts for the fifteen month period ended June 30, 2007 and
provided for adjusting the net result of the transactions related to Radio business for the period March 31,
2006 till the effective date of the Modified Composite Scheme i.e. March 31, 2008 in the General reserve
of the Company.
During Period 2009, the Board of Directors of the Company, members of the Company and the Hon‟ble
High Court of Judicature at Bombay approved a Scheme of Arrangement („the Radio Scheme') which
provided for demerger of the Radio business of the Company effective April 1, 2008 to Reliance Broadcast
Network Limited.
Accordingly, transactions related to Radio business do not form part of the statement of profit and loss for
the Period 2008. However, the assets and liability were included in the summary statement of assets and
liability in Period 2008. The assets and liabilities of the Radio business for Period 2008 which are included
in the statement of assets and liability of the Company are:
F-145
Particulars Period 2008
(` in lakhs)
Fixed assets Gross block 32,728.23
Less: Accumulated depreciation 3,845.38
Net block 28,882.85
Capital work in progress 2,309.17
Current assets Inventories 17.67
Sundry debtors 6,679.51
Cash and bank balances 843.71
Loans and advances 6,387.06
13,927.95
Current liabilities and provisions Current liabilities 4,348.71
Provisions 626.94
4,975.65
Net working capital 8,952.30
Less: Loans 2,046.28
Net capital employed 38,098.04
(Refer note 1 of V of D of Annexure IV for details of the Modified Composite Scheme of Amalgamation and
Arrangement given effect to in the accounts of the Company for Period 2008 and note 1 of IV of D of Annexure IV
for details of the Scheme of Arrangement given effect to in the accounts of the Company for Period 2009)
C. Extract of other matters / matter of emphasis referred by auditors in their reports as reproduced below:
a) Period 2012
i) Without qualifying our report, we draw attention to note 45 to the financial statements; the Company‟s
net worth is fully eroded and has a negative net worth of ` 20,232.70 lakhs, the Company has incurred a
loss of ` 70,356.30 lakhs for the eighteen month period April 1, 2011 to September 30, 2012, indicating the
existence of uncertainty that may cast doubt about the Company‟s ability to continue as a going concern.
Considering the matters set out in the said note, this financial statement is prepared on a going concern
basis.
(Refer note 4 of I of D of Annexure IV for note 45 which has been referred to above)
ii) Under clause (x) of CARO –
The accumulated losses of the Company are more than 50% of its net worth and it has incurred cash losses
in the current financial period and in the immediately preceding financial year.
F-146
iii) Under clause (xi) of CARO –
In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of its dues to bankers or financial institutions or bondholders, however there have
been instances of delays in payment of principal amount which are subsequently paid.
Nature of default Principal amount (`
in lakhs)
Due date Date of payment
Principal loan amount 12,500.00 March 28, 2012 May 14, 2012
13,333.33 March 31, 2012 May 11, 2012
1,250.00 December 16, 2011 December 30, 2011
1,000.00 May 3, 2012 May 6, 2012
iv) Under clause (xvii) of CARO –
According to the information and explanations given to us and on an overall examination of the Balance
sheet of the Company, we report that the Company has used funds raised on short term basis for long term
investments. The Company has used short term borrowings aggregating ` 54,320.00 lakhs to fund long
term purposes.
v) Under clause (xxi) of CARO –
According to the information and explanations given to us, no fraud by the Company has been noticed or
reported during the period. Further, Company has reported a possible misappropriation of provident fund
by the contractor engaged by the Company amounting to approximately ` 588.40 lakhs. The Company has
filed a criminal complaint against the Contractor and the matter is currently under investigation
b) Period 2011
i) Under clause (x) of CARO –
The accumulated losses of the Company are more than 50% of its net worth and it has incurred cash losses
in the current financial year and in the immediately preceding financial year.
ii) Under clause (xvii) of CARO –
According to the information and explanations given to us and on an overall examination of the Balance
sheet of the Company, we report that the Company has used funds raised on short term basis for long term
investments. The Company has used short term borrowings aggregating ` 67,740.00 lakhs to long term
purpose.
c) Period 2010
i) Without qualifying our report, we draw attention to note 17 of schedule 22 to the financial statements
regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the financial period
ended March 31, 2008, the Company re-classified the liability towards FCCB as non–monetary liability
inter-alia on the basis of the trend of earnings, movement of the Company‟s share prices and conversion
option exercised by the FCCB holders. The Company continues to classify the liability towards FCCB as
non–monetary liability as in its view the current fall in the market price of the Company‟s share price and
non-conversion by bond holders is a temporary aberration, consequently, the foreign exchange fluctuation
gain for the year aggregating ` 1,718.10 lakhs has not been recognised and the said liability has not been
restated at the year-end exchange rate.
F-147
An alternate view exists that the liability towards FCCB is a monetary liability and should be restated at the
year-end exchange rate in accordance with Accounting Standard 11 - „The Effects of Changes in Foreign
Exchange Rates‟ prescribed in the Companies (Accounting Standards) Rules, 2006. There is no specific
guidance of The Institute of Chartered Accountants of India on accounting for foreign currency bonds
convertible into equity shares at the option of the holder. Had the said liability been considered as a
monetary liability as before, the loss before tax for the current year would be lower by ` 1,718.10 lakhs and
the reserves and surplus would be lower by ` 1,272.30 lakhs.
(Refer note 5 of III of D of Annexure IV for note 17 of Schedule 22 which has been referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
ii) Under clause (xvii) of CARO –
According to the information and explanations given to us and on an overall examination of the Balance
sheet of the Company, we report that the Company has used funds raised on short term basis for long term
investments. The Company has used short term borrowings aggregating ` 26,560 lakhs to fund fixed assets,
investments and long term loans to subsidiaries.
d) Period 2009
i) Without qualifying our report, we draw attention to Note 19 of Schedule 22 to the financial statements
regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the previous financial
period ended March 31, 2008, the Company reclassified the liability towards FCCB as non–monetary
liability inter-alia on the basis of the trend of earnings, movement of the Company‟s share prices and
conversion option exercised by the FCCB holders. The Company continues to classify the liability towards
FCCB as non– monetary liability as in its view the current fall in the market price of the Company‟s share
price and non conversion by bond holders during the year is a temporary aberration, consequently, the
foreign exchange fluctuation (net loss) for the year aggregating ` 1,130.10 lakhs has not been recognised
and the said liability has not been restated at the period-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be restated at the
period-end exchange rate in accordance with Accounting Standard 11 - „The Effects of Changes in Foreign
Exchange Rates‟ prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central
government in consultation with the National Advisory Committee on Accounting Standards. There is no
specific guidance of The Institute of Chartered Accountants of India on accounting for foreign currency
bonds convertible into equity shares at the option of the holder. Had the said liability been considered as a
monetary liability, the loss before tax for the current year would be higher by ` 1,130.07 lakhs and the
reserves and surplus would be lower by ` 2,990.40 lakhs.
(Refer note 7 of IV of D of Annexure IV for note 19 of Schedule 22 which has been referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
ii) Without qualifying our opinion, we draw attention to Note 2 of Schedule 22 to the financial statements.
As more fully explained in the said Note, during the year, the Hon‟ble High Court of Judicature at Mumbai
vide its order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company with its wholly
owned subsidiaries Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Rave
F-148
Entertainment Private Limited and Mahimna Entertainment Private Limited, under sections 391 to 394 of
the Act. Pursuant to the said Scheme the Company has made an adjustment for diminution in value of its
assets (production and distribution rights, fixed assets, investments, debtors and loans and advances)
aggregating ` 15,669.70 lakhs by debiting the same to capital reserve instead of the statement of profit and
loss. Had the Company debited the statement of profit and loss the loss before tax for the year would be
higher by the said amount.
(Refer note 2 of IV of D of Annexure IV for note 2 of Schedule 22 which has been referred to above)
iii) Under clause (ix) (a) of CARO –
According to the information and explanations given to us and on the basis of our examination of the
records of the Company, amounts deducted / accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees‟ State Insurance, Income tax, Sales-tax / VAT,
Customs duty, Entertainment tax, Investor Education and Protection Fund, Cess and other material
statutory dues have been generally regularly deposited during the year by the Company with the
appropriate authorities. In respect of service tax, management is in the process of reconciling the amounts
accrued as per the books of account on a monthly basis as compared to the payment records maintained.
Based on the payment records examined by us, the Company has been generally regular in depositing the
said amounts with the appropriate authorities. As informed to us, the Company did not have any dues on
account of Wealth tax. There were no dues on account of cess under Section 441A of the Act since the date
from which the aforesaid section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us and except for the outcome of the reconciliation
referred to above, no undisputed amounts payable in respect of Provident fund, Employees‟ State
Insurance, Income tax, Sales-tax / VAT, Service tax, Customs duty, Entertainment tax, Investor Education
and Protection Fund and other material statutory dues were in arrears as at March 31, 2009 for a period of
more than six months from the date they became payable except for ` 391.30 lakhs being entertainment tax
pertaining to multiplexes / single screens where the Company has made an application for availing
exemption under the relevant Act retrospectively from the date of commencement of operations of the said
multiplex. Also, as more fully explained in note 3 of Schedule 22 to the financial statements, no amount has
been accrued in respect of Maharashtra Value Added Tax.
(Note 3 of Schedule 22 refers to disclosure of contingent liabilities in Period 2009, refer Annexure XIII for
details of contingent liabilities)
e) Period 2008
i) Without qualifying our report, we draw attention to Note 1 of Schedule 22 to the financial statements. As
more fully explained in the said Note, during the period, the Hon'ble High Court of Judicature at Bombay
vide its order dated March 7, 2008 sanctioned the Modified Scheme of Amalgamation and Arrangement
('the Modified Scheme') between the Company, Entertainment One India Limited ('E-ONE') and Mukta
Adlabs Digital Exhibition Private Limited ('MADEL')#. The Scheme was filed with the Registrar of
Companies ('ROC') on March 31, 2008. Pending completion of licensing and other procedural formalities,
the original composite Scheme of amalgamation and arrangement between the Company, E-ONE,
MADEL, Reliance Unicom Limited ('RUL') ## and their respective shareholders and creditors sanctioned
by the Hon'ble High Court of Judicature at Bombay vide its order dated September 15, 2006 was not filed
with the Registrar of Companies ('ROC') as required under Section 391(3) of the Companies Act, 1956 ('the
Act'). However, the said original Scheme was given effect to by the Company's management in the
F-149
previous period's financial statements for the fifteen months ended June 30, 2007, so as to give effect to the
substance of the Scheme as approved by the Hon'ble High Court of Judicature at Bombay. The Modified
Scheme inter-alia provides that the net results of the transactions related to the radio business of the
Company for the period from March 31, 2006 to the Effective date (i.e. the date of filing the Modified
Scheme with the ROC) be adjusted in the General reserve of the Company (the original scheme provided
for the demerger of the radio business of the Company to RUL## effective March 31, 2006). As the
original scheme was given effect to in the previous period's financial statements for the fifteen months
ended June 30, 2007, only the modifications to the original scheme have been given effect to in the current
period's financial statements (including reversal of demerger of radio business to RUL##).
# - The name of the Company was subsequently changed to Adlabs Multiplex and Theatres Limited
## - The name of the Company was subsequently changed to Reliance Broadcast Network Limited
(Refer note 1 of V of D of Annexure IV for note 1 of Schedule 22 which has been referred to above)
ii) Without qualifying our report, we draw attention to Note 21 of Schedule 22 to the financial statements
regarding accounting of the Foreign Currency Convertible Bonds ('FCCB'). During the current period, the
Company reclassified the liability towards FCCB as non-monetary liability inter-alia on the basis of the
trend of earnings and movement of the Company's share prices. Accordingly, the foreign exchange
fluctuation (net loss) aggregating to ` 438.10 lakhs accounted in previous period has been reversed and the
foreign exchange fluctuation loss for the current period aggregating to ` 3,621.80 lakhs has not been
recognised by management and the said liability has not been revalued at the period-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be revalued at
the period-end exchange rate in accordance with Accounting Standard 11 - 'The Effects of Changes in
Foreign Exchange Rates' prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the
Central government in consultation with the National Advisory Committee on Accounting Standard. There
is no specific guidance of The Institute of Chartered Accountants of India on accounting for foreign
currency bonds convertible into equity shares at the option of the holder. Had the said liability been
considered as a monetary liability as before, the profit after tax would be lower by ` 4,118.90 lakhs.
(Refer note 7 of V of D of Annexure IV for note 21 of Schedule 22 which has been referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
iii) Under clause (ix) (a) of CARO –
According to the information and explanations given to us and on the basis of our examination of the
records of the Company, amounts deducted / accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees' State Insurance, Income tax, Customs duty,
Entertainment tax and other material statutory dues have been generally regularly deposited during the
period by the Company with the appropriate authorities. In respect of service tax and sales tax / VAT,
management is in the process of reconciling the amounts accrued as per the books of account on a monthly
basis as compared to the payment records maintained. Based on the payment records examined by us, the
Company has been generally regular in depositing the said amounts with the appropriate authorities. As
informed to us, the Company did not have any dues on account of Wealth tax and Investor Education and
Protection Fund. There were no dues on account of cess under Section 441A of the Act since the date from
which the aforesaid section comes into force has not yet been notified by the Central Government.
F-150
According to the information and explanations given to us and except for the outcome of the reconciliation
referred to above, no undisputed amounts payable in respect of Provident fund, Employees' State Insurance,
Income tax, Sales tax / VAT, Service tax, Customs duty, Entertainment tax and other material statutory
dues were in arrears as at March 31, 2008 for a period of more than six months from the date they became
payable except for ` 280.30 lakhs being entertainment tax pertaining to a multiplex where the Company has
made an application for availing exemption under the relevant Act retrospectively from the date of
commencement of operations of the said multiplex. Also, as more fully explained in note 4 of Schedule 22
to the financial statements, no amount has been accrued in respect of Maharashtra Value Added Tax.
(Note 4 of Schedule 22 refers to disclosure of contingent liabilities in Period 2008, refer Annexure XIII for
details of contingent liabilities)
D. Extract of significant notes from audited financial statements
I. For Period 2012
1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatres, office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars Minimum lease
payments (` in
lakhs)
Amounts due within one year from the balance sheet date 13,569.00
Amounts due in the period between one year and five years 44,636.40
Amount due after five years 65,270.60
Total 123,476.00
Amount payable within lock-in-period is ` 73,317.60 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 23,708.60 lakhs
(excluding amount capitalised ` 268.30 lakhs)
2. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency Period 2012
Amount – foreign
currency (lakhs)
Amount – (` in lakhs)
Trade and other
receivables
USD
821.70 43,383.70
GBP 108.90 9,301.40
EURO 2.30 159.00
Trade and other USD 1.70 88.60
F-151
Particulars Currency Period 2012
Amount – foreign
currency (lakhs)
Amount – (` in lakhs)
payables
GBP 0.10 4.50
EURO 0.20 11.00
MYR 0.10 0.90
Borrowings USD 75.30 3,974.50
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
September 30,
2012 Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited (up to June 3, 2011) India Nil
Divya Shakti Marketing Private Limited India 50%
Details of Joint Venture
Particulars Period 2012
Balance Sheet
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 111.50
(b) Reserves and surplus (89.90)
LIABILITIES
Non-current liabilities
(a) Long term borrowing 211.70
(b) Other long-term liabilities 0.50
(c) Long-term provisions 0.30
Current liabilities
(a) Trade payable 79.80
(b) Other current liabilities 47.50
Total 361.40
ASSETS
Non-current assets
(a) Fixed assets
Tangible assets 206.50
F-152
Particulars Period 2012
(b) Long-term loans and advances 70.30
Current assets
(a) Inventories 3.70
(b) Trade Receivables 23.40
(c) Cash and cash equivalents 30.40
(d) Short-term loans and advances 11.90
(e) Other current assets 15.20
Total 361.40
Statement of Profit and loss
Revenue
(a) Revenue from operations 1,109.80
(b) Other income 8.70
Total Revenue 1,118.50
Expenses
Direct operation expenses 525.90
Employee benefit expense 57.20
Finance cost 1.10
Depreciation / amortisation expense 102.50
Other expenses 642.50
Total Expenses 1,329.20
(Loss) before tax (210.70)
Tax Expenses
(1) Current tax 17.50
(2) Deferred tax (credit)/ charge 0.10
(Loss) for the period (228.30)
OTHER MATTERS
1. Contingent Liabilities 98.00
2. Capital Commitments Nil
Movement of the aggregate Shareholders‟ funds of the Joint ventures:
Shareholders‟ funds as at beginning of the period 423.90
Add: Issue of shares by joint venture 125.00
Add: Share of (loss) / profits for the period (228.30)
F-153
Particulars Period 2012
Effect of disposal of joint ventures (299.00)
Shareholders‟ funds as at the end of the period 21.60
Note:
Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Company has decided to provide for diminution in the value of investments in
the Joint Venture amounting to ` 825.06 lakhs.
4. Considering the continuing substantial losses incurred by the Company, its net worth has been eroded.
However, having regard to improved operational performance on account of stabilisation of new businesses
in films and media services, financial support from its promoters, further restructuring exercise being
implemented etc, the financial statements of the Company have been prepared on the basis of going
concern and no adjustments are required to the carrying value of assets and liabilities.
5. The shareholders of the Company have approved on February 21, 2012 through postal ballot the resolution
to sell or otherwise dispose of the Company‟s whole or part of undertakings pertaining to the Film and
Media Services and Exhibition business on a going concern basis to its wholly owned subsidiaries at
consideration not less than tax written down values as the board may decide and on such terms and
conditions and in such manner as may be decided by the board and the wholly owned subsidiaries. Since
necessary approval from lenders and other appropriate authorities are still awaited, the Company has not
executed relevant agreements with its subsidiaries. The appropriate accounting treatment / disclosures will
be given once the requisite approvals are obtained.
6. The Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in the Company‟s film and media
services division. The investment is proposed to be made into the subsidiary of the Company, into which
our film and media services division will be transferred. No definitive agreement has been executed in
respect of the proposed transaction. Though exclusivity period as per non-binding term sheet has been
expired on October 15, 2012, the Company and the fund are in process of extending exclusivity period.
7. Exceptional items includes:
a. Provision of ` 6,921.90 lakhs made for advances given to a wholly owned subsidiary – Reliance
MediaWorks (Mauritius) Limited, which suffered a loss on sale of its investments held in
Exhibition operations in Malaysia.
b. Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary of
Digital Domain Media Group Inc. ('DDMG') for various services rendered. On September 11,
2011, DDMG along with all its subsidiaries filed for bankruptcy proceedings in the United States
of America. The amount provided for outstanding balances is ` 305.30 lakhs.
8. During Period 2012, the Company has dropped several properties under development / completed
properties and hence has written off the carrying value of capital work-in-progress of ` 4,424.60 lakhs and
deposits of ` 981.50 lakhs pertaining to these properties.
9. During Period 2012, the Company has sold its shareholding in
a. A joint venture - Cineplex Private Limited effective June 3, 2011
b. Subsidiaries – Sri Ramakrishna Theatres Limited effective May 28, 2011, Rave Entertainment and
Food Nepal Private Limited effective April 30, 2012, Reliance MediaWorks (Malaysia) Sdn. Bhd.
effective September 21, 2012 and Reliance MediaWorks Big Cinemas Sdn. Bhd. (formerly known
as Big Cinemas Lotus Five Star Sdn. Bhd.) effective September 21, 2012
F-154
10. Interest and finance charges (net) include loss on derivative transactions (net) of ` 5,966.80 lakhs.
II. For Period 2011
1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Period 2011
(` in lakhs)
Amounts due within one year from the balance sheet date 11,445.10
Amounts due in the period between one year and five years 52,967.90
Amounts due after five years 73,466.30
Total 137,879.30
Amount payable within lock-in-period is ` 81,291.30 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 12,527.10 lakhs excluding amount
capitalised ` 906.20 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contract pertaining to Interest rate swap for long term loans to a
Company (Assignee), who has advised the Company regarding entering into these contracts. The Assignee
had advised the Company with regards to entering into these derivative contracts and has indemnified the
Company with regards to any mark to market losses that the Company will have to incur on termination of
these contracts. Consequently, the total mark to market loss of ` 1,921.40 lakhs has not been recognised by
the Company in its statement of profit and loss.
For the same reason, the Company has also not recognised a liability for these MTM losses and amounts
receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
March 31, 2011
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
F-155
Details of Joint ventures
Particulars Period 2011
(` in lakhs)
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 74.00
(b) Reserves and surplus 349.90
Share application money, pending allotment 125.00
LIABILITIES
Non-current liabilities
(a) Long-term borrowings 383.00
(b) Deferred tax liabilities (net) 38.40
(c) Other long-term liabilities 4.30
(d) Long-term provisions 1.00
Current liabilities
(a) Trade payables 103.70
(b) Other current liabilities 48.30
(c) Short-term provisions 80.30
Total 1,207.90
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets (including capital work-in-progress) 761.90
(b) Long-term loans and advances 168.00
Current assets
(a) Current investments 10.40
(b) Inventories 11.80
(c ) Trade receivables 84.60
(d) Cash and bank balances 33.90
(e) Short-term loans and advances 101.10
(f) Other current assets 36.20
Total 1,207.90
F-156
Particulars Period 2011
(` in lakhs)
Statement of profit and loss
(a) Revenue from operations 1,093.00
(b) Other income 9.30
Total revenue 1,102.30
Expenses
Direct operational expenses 540.10
Employee benefits expense 54.40
Finance costs (net) 14.30
Depreciation / amortisation expense 112.00
Other expenses 419.60
Total expenses 1,140.40
Loss before tax (38.10)
Tax expenses
(1) Current tax 30.30
(2) Deferred tax (credit) (1.00)
Loss for the period (67.40)
OTHER MATTERS
1. Contingent liabilities 116.20*
2. Capital commitments Nil
*amount is not quantifiable in case of joint venture
Movement of the aggregate shareholders funds of the joint
ventures:
Shareholder‟s funds as at beginning of the period 491.30
Add: Share of loss for the period (67.40)
Shareholder‟s funds as at the end of the period 423.90
4. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency Period 2011
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
Trade and other receivables USD 770.80 34,994.80
F-157
Particulars Currency Period 2011
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
GBP 51.90 3,778.20
EURO 2.30 149.90
Trade and other payables USD 5.80 262.80
GBP 0.20 11.50
EURO 0.10 4.20
Buyers credit USD 72.30 3,283.90
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible
Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs which were
convertible at any time on or after March 7, 2006 and up to the close of the business on January 19, 2011
by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company with full
voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in Terms and
Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `
54.26=EUR 1.00. The Bonds were listed on the Singapore Exchange Securities Trading Limited („SGX
ST‟). Of the above, bondholders holding bonds of value Euro 633.50 lakhs opted for conversion in Period
2008. During Period 2009, the Company demerged its radio division to Reliance Broadcast Network
Limited. As per the terms of FCCB‟s issued, the conversion price of the bonds is subject to adjustment and
the Company was awaiting a confirmation from the bondholders till the date of redemption. Unless
previously redeemed, converted or purchased and cancelled, the bonds will mature on January 26, 2011 at
121.679 per cent of the principal amount.
During Period 2008, the Company classified the liability towards FCCB‟s as non–monetary liability inter-
alia on the basis of the trend of earnings, movement of the Company's share prices and conversion option
exercised by the FCCB holders. On January 25, 2011, the entire FCCB‟S outstanding as at March 31,
2010, aggregating to Euro 206.50 lakhs have been redeemed at ` 15,814.20 lakhs (including premium `
3,085.40 lakhs). Consequently on redemption, foreign exchange loss aggregating to ` 1,489.60 lakhs has
been accounted.
(Refer note (c) of B of Annexure IV)
6. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of 20%.
During Period 2011, the Company has received all the money receivable as per the shareholders agreement
and sold the shares. This investment was made by the Company with the intention of investment in the
movie "Sultan: The warrior". However, during Period 2010, the Company had issued a letter of termination
demanding refund for the moneys paid by the Company and filed a recovery suit against Orcher Studios, as
per a shareholders‟ agreement signed by the Company which has been agreed to by Orcher Studios. Since,
the Company has intention of selling the shares; the Company has decided not to consider Sultan as an
associate under AS-18 Related Party Disclosures and AS-23 'Accounting for Associates in Consolidated
Financial Statements. The outstanding balance of Sultan Production Private Limited was ` 1,158.80 lakhs
as at March 31, 2010, of which the Company had considered ` 120.00 lakhs as doubtful in the previous
year and provided for the same.
F-158
7. During Period 2011, the Company has sold assets of ` 10,417.30 lakhs for ` 13,997.20 lakhs pertaining to
the theatrical exhibition segment and leased them back subsequently. The profit on sale of these assets has
been disclosed under the Annexure of other income.
8. Interest and finance (net) charge includes loss on derivative contract (net) ` 2,166.90 lakhs.
III. For Period 2010
1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars
Period 2010
(` in lakhs)
Amounts due within one year from the balance sheet date 8,089.60
Amounts due in the period between one year and five years 33,154.40
Amount due after five years 71,712.40
Total 112,956.40
Amount payable within lock-in-period is ` 54,805.40 lakhs
Amount debited to statement of profit and loss for lease rental is ` 8,092.60 lakhs excluding amount
capitalised ` 1,071.40 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contracts pertaining to Options for FCCB and interest rate
swap for long term loans to a Company (Assignee), who has advised the Company regarding entering
into these contracts. The Assignee had advised the Company with regards to entering into these
derivative contracts and has indemnified the Company with regards to any mark to market losses that
the Company will have to incur on termination of these contracts. Consequently, the total mark to
market loss of ` 2,750.40 lakhs has not been recognised by the Company in its statement of profit and
loss. For the same reason, the Company has also not recognised a liability for these MTM losses and
amounts receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
March 31, 2010
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
F-159
Details of Joint ventures
Particulars
Period 2010
(` in lakhs)
I Assets
1. Fixed assets net block(including Capital work-in-progress) 871.00
2. Current assets, loans and advances
a) Inventories
11.40
b) Sundry debtors
70.50
c) Cash and bank balances
77.80
d) Interest accrued but not due
1.00
e) Loans and advances
277.80
II Liabilities
1. Shareholders' fund
491.30
2. Advance towards share application money 125.00
3. Unsecured loans
456.80
4. Deferred tax liability (net) 39.50
5. Current liabilities and provisions
a) Liabilities
153.90
b) Provisions
43.00
III Income
1. Income from theatrical exhibition (net of duties and taxes) 1,027.30
2. Other Income
36.00
IV Expenses
1. Direct operational expenses
539.70
2. Personnel costs 53.60
3. Other operating and general administrative expenses
348.60
4. Depreciation
111.80
5. Interest
44.40
Loss before tax
(34.80)
Provision for tax (including deferred tax)
(47.50)
Profit after tax
12.70
V. OTHER MATTERS
1. Contingent liabilities
948.20
2. Capital commitments
Nil
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period
478.60
Add: Share of profits for the period
12.70
At the end of the period
491.30
F-160
4. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency Period 2010
Amount – foreign
currency (lakhs)
Amount – (` in lakhs)
Sundry debtors USD 2.60 117.60
GBP 0.10 10.80
Advance from
customers
USD 0.10 2.20
Sundry creditors USD 1.60 71.40
EURO 0.10 8.00
Loans and advances USD 601.40 27,080.10
GBP 35.70 2,422.90
EURO 1.60 96.50
Buyers credit USD 18.20 817.90
GBP 1.20 78.00
EURO 8.20 496.70
Foreign currency
convertible bonds
(FCCB) (Refer note (c)
of B of Annexure IV)
EURO 206.50 12,511.90
Provision for premium
on redemption on
FCCB
EURO 44.80 2,712.40
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible
Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are
convertible at any time on or after 7 March 2006 and up to the close of the business on January 19, 2011 by
the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company with full
voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in Terms and
Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `
54.26=EUR 1.00. Of the above bondholders holding bonds of value Euro 633.50 lakhs opted for conversion
in Period 2008. The balance bond values aggregating to EURO 206.50 lakhs are outstanding as on March
31, 2010. During Period 2009, the Company demerged its radio division to Reliance Broadcast Network
Limited (refer note 1 of IV of D of Annexure IV). As per the terms of bond issue, the conversion price of
the bonds is subject to adjustment, after agreement with the bondholders. Pending finalisation of
F-161
agreement, the revised conversion price is not yet decided. Consequently the equity shares issuable on
conversion of FCCB - 2,061,884 have been computed based on initial conversion price. The Bonds are
listed on the Singapore Exchange Securities Trading Limited („SGX ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions. Unless
previously redeemed, converted or purchased and cancelled, the bonds will mature on January 26, 2011 at
121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2010 is as follows:
Period 2010
(` in lakhs)
Opening balance
3,084.79
Adj: foreign exchange fluctuation
(372.50)
Closing balance
2,712.29
During Period 2008, the Company classified the liability towards FCCB as non–monetary liability
inter-alia on the basis of the trend of earnings, movement of the Company's share prices and
conversion option exercised by the FCCB holders. The Company continues to classify the liability
towards FCCB as a non–monetary liability as in its view the current fall in the market price of the
Company‟s share price and non-conversion by bond holders is a temporary aberration. Further,
pursuant to Scheme of Arrangement for demerger of the Radio business, the conversion price is subject
to adjustment, after agreement with bond holders. The Company estimates that there will be significant
adjustments to conversion price considering the value of Radio business which has demerged.
Consequently, the foreign exchange fluctuation (gain) / loss for Period 2010 aggregating to `
(1,718.10) lakhs has not been recognised by management. Cumulative loss not recognised due to
classification of FCCB as a non-monetary liability is ` 1,272.20 lakhs in respect of outstanding
FCCB's. Unrecognised losses on FCCB's which were converted into equity shares in earlier periods is
` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
6. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of 20%.
This investment was made by the Company with the intention of investment in the movie "Sultan: The
warrior". However, during Period 2010, the Company has issued a letter of termination demanding refund
for the moneys paid by the Company and filed a recovery suit against Orcher Studios, as per a
shareholders‟ agreement signed by the Company which has been agreed to by Orcher Studios.
Since, the Company has intention of selling the shares; the Company has decided not to consider Sultan as
an associate under AS-18 „Related Party Disclosures‟ and AS-23 'Accounting for Associates in
Consolidated Financials Statements‟.
The outstanding balance of Sultan Production Private Limited is ` 1,158.80 lakhs of which the Company
has considered ` 120.00 lakhs as doubtful in the current year and provided for the same.
7. Interest and finance charges (net) include loss on derivative transactions (net) of ` 3,539.20 lakhs.
F-162
IV. For Period 2009
1. Demerger of the Radio business of the Company to Reliance Broadcast Network Limited
The Board of the Company in their meeting held on October 25, 2008 approved a Scheme of Arrangement
(„the Radio Scheme‟) between Reliance Broadcast Network Limited („RBNL‟), a wholly owned subsidiary
and the Company for the de-merger of the Radio business (constituting the Radio segment) of the Company
into RBNL.
The shareholders of the Company accorded their approval in a court convened meeting of members of the
Company held on January 22, 2009. The Radio Scheme was approved by the Hon‟ble High Court of
Judicature at Bombay vide its order dated April 4, 2009 and filed with the Registrar of Companies („ROC‟)
on June 30, 2009, as required under Section 391(3) of the Act after obtaining approval from the Ministry of
Information and Broadcasting („MIB‟) for vesting of radio licenses held by the Company in the name of
RBNL.
As per the Radio Scheme, the Radio business of the Company stands transferred to RBNL with effect from
April 1, 2008, the Appointed Date and has been given effect to on June 30, 2009, being the Effective Date
and the accounting treatment prescribed by the Radio Scheme has been given effect to in the financial
statements for Period 2009.
All the assets and liabilities, directly allocable and as mutually determined by the Board of Directors of
RBNL and the Company, of the Radio business as at April 1, 2008 have been transferred at their respective
book values. Further, general borrowings of the Company as on April 1, 2008 have been allocated between
the Company and RBNL on the basis of ratio of total assets of the Company immediately before giving
effect of the Radio Scheme. In consideration of the demerger, RBNL will allot equity shares of ` 5 each in
the ratio of 1:1 and upon issue of shares as above the Company‟s investment in shares of RBNL will stand
cancelled.
As per the provisions of the Radio Scheme, excess balances of assets transferred over liabilities and the
cost of investments in RBNL cancelled has been debited to Securities premium reserve as follows:
Particulars Amount
(` in lakhs)
Assets of Radio business as of April 1, 2008 transferred as per the provisions of the
Radio Scheme 44,929.50
Liabilities of Radio business as of April 1, 2008 transferred as per the provisions of the
Radio Scheme (6,831.50)
General borrowings of the Company as of April 1, 2008 allocated between RBNL
(Radio Business) and the Company as per the provisions of the Radio Scheme (22,400.00)
Excess of net assets transferred to RBNL (Radio business) 15,698.00
Cancellation of investment in RBNL 1,010.00
Total amount debited to Securities premium reserve as per the provisions of the
Radio Scheme 16,708.00
F-163
The Radio business has been held / carried on in trust for the period April 1, 2008 till the Effective Date by
the Company. Accordingly, the Company has charged interest, at an agreed rate on the amount receivable
as at the appointed date and subsequent funding till the Effective Date. The total receivable ` 26,095.00
lakhs (includes interest ` 2,584.90 lakhs) has been disclosed as a recoverable from RBNL.
However, for Period 2009 financial statements, pending allotment of shares by RBNL, the investment has
been cancelled to give effect to the substance of the Radio Scheme as approved by the Hon‟ble High Court
of Judicature at Bombay and RBNL ceases to be a subsidiary for Period 2009 financial statements.
2. Scheme for merger of wholly owned subsidiaries with the Company
The Board of the Company in their meeting held on January 30, 2009 approved the Scheme of
Amalgamation („Amalgamation Scheme‟) of the Company („Transferee‟) with its wholly owned
subsidiaries Adlabs Multiplexes and Theatres Limited („AMTL‟), Adlabs Multiplex Limited („AML‟),
Mahimna Entertainment Private Limited („MEPL‟) and Rave Entertainment Private Limited („REPL‟)
(collectively referred to as the Transferor Companies). The Amalgamation Scheme was approved by the
Hon‟ble High Court of Judicature at Bombay vide its order dated May 8, 2009 and filed with the Registrar
of Companies („ROC‟) on May 29, 2009, as required under Section 391(3) of the Act.
AMTL, AML, and REPL are engaged in the exhibition business and have been included in the theatrical
exhibition segment. MEPL has been included in the unallocated corporate segment.
As per the Amalgamation Scheme, AMTL, AML, MEPL and REPL amalgamated with the Company with
effect from April 1, 2008, the Appointed Date and has been given effect to on May 29, 2009, being the
Effective Date and the accounting treatment prescribed by the Amalgamation Scheme has been given effect
to in the financial statements for Period 2009.
In accordance with the requirements of the Amalgamation Scheme, the credit aggregating ` 5,826.20 lakhs
to Capital reserve has been arrived at as follows:
All assets and liabilities of the Transferor companies as at April 1, 2008 which have been identified by
the Board of Directors have been recorded at their respective fair values (as determined based on
valuation reports from Government approved valuer / management estimates) as on March 31, 2009.
Investments in the equity shares of the Transferor companies as appearing in the books of the
Transferee Company as at March 31, 2009 have been cancelled. The excess of net assets of the
transferor companies taken over at fair value (as determined on March 31, 2009) over the cost of
investment in these companies, aggregating ` 3,605.80 lakhs has been credited to Capital reserve.
The Company has recorded an increase in the value of its assets based on revaluation of certain assets
of the Company pertaining to the theatrical exhibition and film production services business. The total
increase in value of assets of the Company is ` 17,890.10 lakhs, based on revaluation reports obtained
from Government approved external valuers. The Company has also reduced the value of its assets by
` 15,669.70 lakhs (Fixed assets and intangible rights ` 3,989.50 lakhs, Debtors ` 2,050.70 lakhs, Loans
and advances including capital advances ` 6,188.50 lakhs and Investments ` 3,441.00 lakhs). The net
increase in the value of assets of the Company ` 2,220.40 lakhs has been credited to Capital reserve
pursuant to the provisions of the Amalgamation Scheme.
The authorised share capital of the Transferor Companies was considered as authorised share capital of
the Transferee Company. Hence, the authorised share capital of the Company has been increased by `
1,602.90 lakhs divided into 32,058,000 shares of ` 5 each.
F-164
The above mentioned accounting treatment is in accordance with the Amalgamation Scheme, had the
Company followed accounting treatment prescribed by AS – 14 “Accounting for Amalgamations” /
Indian GAAP:
The excess of investments over net assets acquired by the Company amounting to ` 1,939.10 lakhs
would have been transferred to Goodwill and would have been amortised over 5 years.
The appreciation in the value of the Company‟s assets aggregating ` 17,890.10 lakhs would have been
credited to the Revaluation reserve instead of being credited to the Capital reserve.
The diminution in the value of the Company‟s assets aggregating ` 15,669.70 lakhs would have been
debited to the statement of profit and loss instead of Capital reserve. Accordingly, had the
Amalgamation Scheme as referred above been accounted for as per the requirements of AS – 14
“Accounting for Amalgamations” / Indian GAAP, the loss for the year would be higher by ` 16,057.60
lakhs, capital reserve would have been lower ` 281.20 lakhs, revaluation reserve would have been
higher by ` 17,890.10 and balance of Goodwill would have been ` 1,551.30 lakhs.
3. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Period 2009
(` in lakhs)
Amounts due within one year from the balance sheet date 6,724.30
Amounts due in the period between one year and five years 27,988.70
Amounts due after five years 71,374.40
Total 106,087.40
Amount payable within lock-in-period is ` 39,398.00 lakhs
Amount debited to statement of profit and loss for lease rental is ` 6,440.60 lakhs excluding amount
capitalised ` 1,244.10 lakhs.
4. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contracts pertaining to Options for FCCB and Interest rate swap
for long term loans to a Company („Assignee‟), who has advised the Company regarding entering into these
contracts. The Assignee had advised the Company with regards to entering into these derivative contracts
and has indemnified the Company with regards to any mark to market losses that the Company will have to
incur on termination of these contracts. Consequently, the total mark to market loss of `14,037.00 lakhs
have not been recognised by the Company in its statement of profit and loss.
F-165
For the same reason, the Company has also not recognised a liability for these MTM losses and amounts
receivable from the Assignee Company.
5. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company Country of
Incorporation
% of ownership
interest as at March
31, 2009
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
Details of Joint ventures
Period 2009
(` in lakhs)
I Assets
1. Fixed assets (including Capital work-in-progress) 964.20
2. Current assets, loans and advances
a) Inventories 11.20
b) Sundry debtors 53.70
c) Cash and bank balances 82.00
d) Interest accrued but not due 0.60
e) Loans and advances 115.00
II Liabilities
1. Shareholders' fund 478.60
2. Unsecured loans 506.80
3. Deferred tax (net) 55.70
4. Current liabilities and provisions
a) Liabilities 159.30
b) Provisions 26.30
III Income
1. Sales (net of duties and taxes) 1,186.70
2. Other income 92.00
IV Expenses
1. Operating expenses 956.80
2. Depreciation 109.70
3. Interest -
Profit before tax 212.20
F-166
Period 2009
(` in lakhs)
Provision for tax (including deferred tax) 51.50
Profit after tax 160.70
V. Other matters
1. Contingent liabilities 1,016.10
2. Capital commitments Nil
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 404.90
Add: Share of profits for the period 160.70
Less: Dividend declared during the period (87.00)
At the end of the period 478.60
6. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency
Period 2009
Amount – Foreign
currency (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 18.20 948.30
GBP 1.70 124.40
EURO 0.20 10.60
Sundry creditors USD 3.80 200.40
GBP 0.10 4.00
EURO 0.10 3.50
Loans and advances USD 333.00 17,375.30
GBP 4.40 327.40
EURO 0.60 40.80
Buyers credit USD 5.30 276.60
GBP 1.20 85.30
EURO 8.20 564.90
Foreign Currency Convertible Bonds
(„FCCB‟) (Refer note (c) of B of Annexure
IV)
EURO 206.50 14,230.00
Provision for premium on redemption of
FCCB
EURO 44.80 3,084.80
F-167
7. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued Zero Coupon Foreign Currency Convertible Bonds
(„Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after 7
March 2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds („the
Bondholders‟) into newly issued equity shares of the Company with full voting rights with par value of ` 5
each („Shares‟) at an initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42
per share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. Of the above bondholders
holding bonds of value Euro 633.50 lakhs opted for conversion in the Period 2008. The balance
bondholders holding bonds of value aggregating to Euro 206.50 lakhs have not opted for conversion and
are outstanding as on March 31, 2009. During Period 2009, pursuant to the Scheme of Arrangement for
demerger of Radio business, the conversion price is subject to adjusted after agreement with the
bondholders and the Company. Pending finalisation of agreement, the revised conversion price is not yet
decided. Consequently the equity shares issuable on conversion of FCCB have been computed based on
initial conversion price. The Bonds are listed on the Singapore Exchange Securities Trading Limited
(„SGX-ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions. Unless
previously redeemed, converted or purchased and cancelled, the bonds will mature on January 26, 2011 at
121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2009 is as follows:
Period 2009
(` in lakhs)
Opening balance
2,839.89
Add: foreign exchange fluctuation
244.90
Closing balance
3,084.79
During Period 2008, the Company re-classified the liability towards Foreign Currency Convertible Bonds
('FCCB') as non–monetary liability inter-alia on the basis of the trend of earnings, movement of the
Company's share prices and conversion option exercised by the FCCB holders. The Company continues to
classify the liability towards FCCB as a non–monetary liability as in its view the current fall in the market
price of the Company‟s share price and non-conversion by bond holders is a temporary aberration.
Consequently, the foreign exchange fluctuation loss for the Period 2009 aggregating to ` 1,130.10 lakhs
has not been recognised by the management. Cumulative loss not recognised due to classification of FCCB
as a non-monetary liability is ` 2,990.40 lakhs in respect of outstanding FCCB's. Unrecognised losses on
FCCB's which were converted into equity shares in earlier periods is ` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s a monetary liability)
8. Impairment Disclosure
During the Period 2009, the Company has impaired certain fixed assets pertaining to the theatrical
exhibition segment on the basis of determination of value in use of each property, which the Company
considers as the relevant Cash Generating Unit („CGU‟) for the purpose of impairment testing. The
Company has considered a discount rate of 11.68%. The amount of impairment loss of ` 551.70 lakhs has
been debited to the Capital reserve pursuant to Scheme of Amalgamation.
F-168
(Refer note 2 of IV of D of Annexure IV)
9. Interest and finance (net) charge includes loss on derivative contract (net) ` 4,864.90 lakhs.
V. For Period 2008
1. Modified Composite Scheme of Amalgamation and Arrangement
The Board of the Company at their meeting held April 23, 2006 approved the Composite Scheme of
Amalgamation and Arrangement (the „Composite Scheme‟) between the Company, Entertainment One
India Limited („E-ONE‟), Adlabs Multiplexes and Theatres Limited („AMTL‟) and Reliance Broadcast
Network Limited („RBNL‟). The shareholders of the Company accorded their approval to the Scheme at
the Annual General Meeting on July 29, 2006. The Composite Scheme was approved by the Hon'ble High
Court of Judicature at Bombay vide its order dated September 15, 2006. The Composite Scheme inter-alia
provided for the following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
the demerger of the radio business of the Company to RBNL effective March 31, 2006.
The Company had made an application to the Ministry of Information and Broadcasting for vesting of
Radio licenses held by it in the name of RBNL. Pending the said approval, the Composite Scheme was not
filed with the Registrar of Companies ('ROC') as required under Section 391(3) of the Companies Act,
1956 ('the Act'). However, for the purpose of the fifteen months ended June 30, 2007 financial statements,
pending completion of licensing and other procedural formalities, the Composite Scheme was given effect
to in view of the Court approval and to give effect to the substance of the Composite Scheme as approved
by the Hon'ble High Court of Judicature at Bombay.
In accordance with the requirements of the Composite Scheme, the merger of E-ONE as well as the digital
business of AMTL and the demerger of the Radio business of the Company was accounted for as follows:
All assets and liabilities of E-ONE as at April 1, 2005 were recorded by the Company at their fair
values. Since E-ONE was a wholly owned subsidiary of the Company, the investment by the
Company in the shares of E-ONE was cancelled against the assets and liabilities acquired on
amalgamation. The excess of net assets taken (at fair value) over the cost of investment in E-ONE
amounting to ` 272.58 lakhs was credited to 'Amounts pending transfer to the Securities premium
account and / or General reserve account as per the Composite Scheme of Amalgamation and
Arrangement'.
All assets and liabilities of the digital business of AMTL as at April 1, 2005 were recorded by the
Company at their book values. Since AMTL was a wholly owned subsidiary of the Company, no
consideration was paid against the assets and liabilities acquired. The excess of liabilities over the
assets taken over (at book value) amounting to ` 44.69 lakhs was debited to 'Amounts pending
transfer to the Securities premium account and / or General reserve account as per the Composite
Scheme of Amalgamation and Arrangement'.
All assets and liabilities of the Radio business of the Company as at March 31, 2006 were
transferred at their respective book values. The aggregate value of net assets transferred pursuant
to the Composite Scheme in excess of ` 10,000 lakhs (which was recorded as receivable from
F-169
RBNL) was recorded in 'Amounts pending transfer to the Securities premium account and / or
General reserve account as per the Composite Scheme of Amalgamation and Arrangement'
Subsequently during the current period, the Board modified the aforesaid Composite Scheme vide circular
mode pursuant to Section 289 of the Companies Act, 1956 on February 13, 2008. The Modified Composite
Scheme of amalgamation and arrangement (the „Modified Scheme‟) between the Company, E-ONE and
AMTL was approved by the Hon'ble High Court of Judicature at Bombay vide its order dated March 7,
2008 and was filed with the ROC as required under Section 391(3) of the Companies Act, 1956 ('the Act')
on March 31, 2008.The Modified Scheme inter-alia provides for the following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
adjusting the net results of the transactions related to Radio business from March 31, 2006 till the
Effective Date in the General reserve account of the Company.
As the Composite Scheme was primarily modified in relation to the Radio business, in respect of
amalgamation of E-ONE and merger of digital business of AMTL, these were already given effect to in the
financial statements of the fifteen month period June 30, 2007. Accordingly, no further adjustments are
made in the Period 2008 financial statements, except that the amounts which were not credited / debited to
'Securities premium' / 'General reserve account ' pending filing the Composite Scheme with ROC have now
been debited / credited to Securities premium / General reserve account as applicable on the filing of the
Modified Scheme with the ROC.
During the Period upto March 31, 2008, E-ONE and AMTL carried on their existing business in trust for
and on behalf of the Company. All vouchers, deeds, licenses, agreements, loan documents, etc are in the
name of E-ONE and AMTL. The tile deeds, licenses, agreements, loan documents, etc are being transferred
in the name of the Company.
As regards the Radio business, the provision relating to demerger of the Radio business of the Company to
RBNL effective March 31, 2006 as provided in the Composite Scheme and given effect to in the fitten
month period ended June 30, 2007 financial statements have been deleted in the Modified Scheme.
Accordingly, all the adjustments effected in the fifteen month period ended June 30, 2007 financial
statements in this regard have been reversed during the Period 2008. Further, in accordance with the
Modified Scheme, the net results of the transactions related to Radio business for the period from March
31, 2006 till the Effective Date (i.e. March 31, 2008) have been debited to General reserve account of the
Company.
The net results of the transactions related to Radio business for the period from March 31, 2006 up to
March 31, 2008 are summarised hereunder:
Particulars Period 2008
(` in lakhs)
Fifteen month
period ended June
30, 2007
(` in lakhs)
Income
11,160.90
3,320.30
Expenditure Direct costs
5,062.10
2,024.60
Personnel costs
3,477.60
2,528.10
F-170
Particulars Period 2008
(` in lakhs)
Fifteen month
period ended June
30, 2007
(` in lakhs)
Other operating and general administrative
expenses * 5,584.10
4,547.60
Interest
1,346.30
2,119.90
Depreciation / amortisation
2,396.60
1,474.80
Loss before tax
(6,705.80)
(9,374.70)
Tax expenses - fringe benefit tax
114.90
75.50
Loss after tax (A) (6,820.70) (B) (9,450.20)
Total (A + B)
(16,270.90)
Tax effect of the above
1,907.60
Balance transferred to General reserve
account 14,363.30
* includes ` 785.80 lakhs (Fifteen month period ended June 30, 2007: ` 2,086.70 lakhs, since reversed)
being interest etc. allocated / charged in the fifteen month period ended June 30, 2007 by Company to the
radio business on net funds utilised in carrying on the Radio business.
For deviation to the accounting treatment recommended in the standard refer note 3 of V of D of Annexure
IV.
2. Acquisition of Rave Entertainment Private Limited ('REPL')
On May 31, 2007, the Company entered into a Share Purchase Agreement ('SPA') with the shareholders of
Rave Entertainment Private Limited ('REPL'), a company engaged inter-alia in the business of owning and
operating multiplexes, for acquisition of 100% stake in that company. One of the conditions precedents to
the SPA was the approval by the Hon'ble High Court of Judicature at Allahabad of the Scheme of demerger
filed by REPL for demerger of Kanpur properties. Pending approval of the Scheme of demerger by the said
Court, the shares of REPL were held in Escrow and the consideration of ` 500 lakhs was disclosed under
loans and advances in the fifteen month period ended June 30, 2007 financial statements. On December
12, 2007, the Hon'ble High Court of Judicature at Allahabad approved the said Scheme of demerger.
Consequently, REPL is now a wholly owned subsidiary of the Company and the amounts placed in Escrow
and those disclosed under loans and advances have been adjusted as per the terms of the SPA.
3. Acquisition of Katch 22 Entertainment Private Limited ('Katch 22')
On April 23, 2007, the Company acquired 100% stake in Katch 22, a company engaged in the production
and distribution of films. Subsequently, pursuant to the Board of Directors' approval vide resolution dated
April 26, 2007; the Company had filed the Scheme of Amalgamation of Katch 22 ('the Katch 22 Scheme')
with the Hon'ble High Court of Judicature at Bombay for the merger of Katch 22 with the Company
effective April 1, 2006. The Katch 22 Scheme was approved by the Hon'ble High Court of Judicature at
Bombay vide its order dated September 14, 2007 and filed with the ROC on October 9, 2007. The Katch 22
Scheme inter-alia provides for the amalgamation of Katch 22 Entertainment Private Limited with the
Company effective April 1, 2006.
In accordance with the requirements of the Katch 22 Scheme, the merger of Katch 22 with the Company
has been accounted for as follows:
F-171
As per the Katch 22 Scheme, Katch 22 amalgamates with the Company retrospectively from April
1, 2006, the Appointed Date. All assets and liabilities of Katch 22 as at April 1, 2006 have been
recorded by the Company at their fair values. Since Katch 22 was a wholly owned subsidiary of
the Company, the investment by the Company in the shares of Katch 22 has been cancelled
against the assets and liabilities acquired on amalgamation. The excess of net assets taken over at
fair value (as determined on the Effective Date i.e. October 9, 2007) over the cost of investment in
Katch 22 amounting to ` 201.80 lakhs has been credited to General reserve account.
The Company has also recorded the reduction of ` 2,000.00 lakhs in the value of its assets
(debtors, unamortised rights and loans and advances) by debit to 'General reserve account' as per
the provisions of the Katch 22 Scheme.
The net results of the transactions relating to Katch from April 1, 2006 up to the Effective Date are as
follows:
Particulars For the period from
July 1, 2007 to October
8, 2007 (` in lakhs)
Fifteen month
period ended
June 30, 2007
(` in lakhs)
Sales and service (net) - 701.90
Other income 23.30 -
Total revenue 23.30 701.90
Direct costs - 1,691.30
Other operating and general administrative expenses 0.20 0.10
Interest - 131.60
Profit before tax 23.10 (1,121.10)
Tax expenses - -
Profit after tax 23.10 (1,121.10)
Impact of Schemes referred to in notes 1 of V of D of Annexure IV and 3 of V of D of Annexure IV:
Had the Company followed the accounting treatment prescribed by AS-14 / generally accepted accounting
principles in India:
` 201.80 lakhs arising from the merger of Katch 22 with the Company and credited to the General
reserve account would have been credited to Capital reserve account;
Reduction of ` 2,000 lakhs in value of the Company's assets would have been debited to the
statement of profit and loss instead of General reserve account;
` 2,086.70 lakhs being interest on monies advances by the Company to the Radio business would
have been reversed in the statement of profit and loss as against the reversal in the General reserve
account, and
The net results / (loss) of the transactions related to Radio business from March 31, 2006 up to the
Effective Date i.e. March 31, 2008 aggregating to ` 14,363.30 lakhs (net of tax benefits) arising
from modification in the Scheme of demerger of Radio business and debited to the General
reserve account would have been debited to statement of profit and loss.
Accordingly, had the Modified Scheme been accounted for in compliance with the requirements of AS 14 /
generally accepted accounting principles in India, the profit for the period before tax would have been
F-172
lower by ` 18,450 lakhs, General reserve account would have been higher by ` 18,248.20 lakhs and Capital
reserve account would have been stated at ` 201.80 lakhs.
4. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Period 2008
(` in lakhs)
Amounts due within one year from the balance sheet date 4,607.80
Amounts due in the period between one year and five years 18,978.80
Amounts due after five years 53,463.80
Total 77,050.40
Amount payable within lock-in-period is ` 38,309.40 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 2,593.50 lakhs.
5. Interest in Joint ventures
Name of the Company Country of incorporation
% of ownership interest as at
March 31, 2008
Swanston Multiplex Cinemas Private Limited India 50.00%
Adlabs Multiplex Limited (Became subsidiary with effect from December 20, 2007)
India -
Cineplex Private Limited India 50.00%
Divya Shakti Marketing Private Limited India 50.00%
Details of Joint ventures
Particulars Period 2008
(` in lakhs)
I. Assets
1. Fixed assets (including Capital work-in-progress) 1,063.80
2. Investments
56.40
3. Current assets, loans and advances
a) Inventories 8.50
b) Sundry debtors 88.40
c) Cash and bank balances 69.30
d) Interest accrued but not due 0.50
e) Loans and advances 73.50
F-173
Particulars Period 2008
(` in lakhs)
II. Liabilities
1. Shareholders' fund
478.90
2. Unsecured loans 634.60
3. Deferred tax (net) 54.10
4. Current liabilities and provisions
a) Liabilities 179.60
b) Provisions 13.20
III. Income
1. Sales (net of duties and taxes) 1,024.10
2. Other income 102.80
IV. Expenses
1. Operating expenses 911.30
2. Depreciation 102.10
3. Interest 0.60
4. Profit before tax 112.90
5. Prior period adjustments (0.40)
6. Provision for tax 30.00
7. Profit after tax 83.30
V. Other Matters
1. Contingent liabilities 2,032.20
2. Capital commitments -
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 497.10
Add: Share of losses for the period (18.20)
At the end of the period 478.90
6. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency Period 2008
Amount – Foreign
currency (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 4.60 184.40
GBP 3.10 246.30
Euro 0.10 6.50
Sundry creditors USD 40.80 1,636.10
GBP 1.60 129.90
F-174
Particulars Currency Period 2008
Amount – Foreign
currency (lakhs)
Amount
(` in lakhs)
Euro 8.20 520.20
Loans and advances USD 21.60 865.80
Euro 7.00 444.20
Foreign Currency Convertible Bonds („FCCB‟) (Refer note (c) of B Annexure IV)
Euro 206.50 13,099.90
Provision for premium on redemption of FCCB Euro 44.80 2,899.90
7. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company ('Issuer') issued Zero Coupon Foreign Currency Convertible Bonds
('Bonds' or 'FCCB') aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after March 7,
2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds ('the
Bondholders') into newly issued equity shares of the Company with full voting rights with par value of ` 5
each ('Shares') at an initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42
per share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. The conversion price is
subject to adjustment in certain circumstances. The Bonds are listed on the Singapore Exchange Securities
Trading Limited ('SGX-ST').
The Bonds may be redeemed, in whole but not in part, at the option of the Issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions. Unless
previously redeemed, converted or purchased and cancelled, the bonds will mature on January 26, 2011 at
121.679 per cent of the principal amount.
During Period 2008, bond holders holding bonds aggregating Euro 633.50 lakhs have opted to convert the
bonds to equity shares. Accordingly shares aggregating to 6,325,420 have been issued to them at a price of
` 543.42 per share (including securities premium of ` 538.42 per share).
The balance in premium account as at March 31, 2008 is as follows:
Period 2008
(` in lakhs)
Opening balance
10,006.59
Add: Reversal of provision for premium on conversion of FCCB
(7,858.20)
Add: foreign exchange fluctuation
691.50
Closing balance
2,839.89
* Premium payable on redemption of FCCB ` 9,880.90 lakhs has been fully provided for and has been
charged to securities premium reserve. During Period 2008, Bond holders holding bonds aggregating Euro
633.50 lakhs have opted to convert their bonds into equity shares.
F-175
During Period 2008, FCCBs have been reclassified as non-monetary liabilities pursuant to inter-alia the
current trend of earnings and market price of the Company's equity share exceeding the conversion price
stipulated in the offer document (bondholders holding 75.42% of the FCCB have exercised conversion
option up to March 31, 2008). Consequently, the foreign exchange fluctuation loss aggregating to ` 438.10
lakhs accounted in the fifteen month period ended June 30, 2007 and year ended March 31, 2006 has been
reversed during the period in the statement of profit and loss and foreign exchange fluctuation loss of `
3,621.80 lakhs for the financial period has not been recognised in the statement of profit and loss.
(Refer (c) of B of Annexure IV for subsequent consideration of FCCB as a monetary liability)
F-176
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Authorised
Equity shares of ` 5/-each 24,000.00 5,000.00 5,000.00 4,602.90 3,000.00
Preference shares of ` 5/-
each 1,000.00 - - - -
25,000.00 5,000.00 5,000.00 4,602.90 3,000.00
Issued, subscribed and
paid-up capital
Equity shares of ` 5/- each,
fully paid-up 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
10 % redeemable non
convertible non cumulative
preference shares (Preference
shares) of ` 5/- each, fully paid-up 147.50 - - - -
2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
(refer notes (a) to (i) below)
(a) Reconciliation of the shares outstanding at the commencement and at the end of the period
Equity shares
No of
Shares
No of
Shares
No of
Shares No of Shares No of Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
At the commencement of the
period 461.26 461.26 461.26 461.26 398.00
Share issued during the
period - - - - 63.26
At end of the period 461.26 461.26 461.26 461.26 461.26
Preference shares
No of
Shares
No of
Shares
No of
Shares No of Shares No of Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
At the commencement of the
period - - - - -
Share issued during the
period 29.50 - - - -
At end of the period 29.50 - - - -
F-177
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
(b) Rights, preferences and restriction attached to equity shares
The Company has only one class of equity shares having par value of ` 5 per share. Each equity holder is
entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. The
dividend proposed, if any by the Board of the Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to
the number of equity shares held by the shareholders.
(c) Rights, preferences and restriction attached to Preference share
Preference shares shall be redeemed at the end of 20 years from the date of allotment i.e. each Preference
shares shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a. (till
date of redemption ) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend, if
any declared during the tenure. However, the premium on redemption will be paid only to the original
subscribers or to the transferees if the transfers have been previously approved by the Company.
Further early redemption at the option of holder of Preference shares can be done, at issue price plus yield as
mentioned above, at any time after the date of allotment by giving not less than two months advance notice to
the Company. Early redemption at the option of Company at the applicable redemption price can be done,
any time after the date of allotment by giving not less than 30 days notice to the Preference share holder.
(d) Names of shareholders holding more than 5% of equity share in the Company
No of
Shares
No of
Shares
No of
Shares No of Shares No of Shares
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
Reliance Land Private
Limited 206.00 206.00 206.00 206.00 206.00
Reliance Capital Limited 85.29 81.05 81.05 29.55 -
AAA Entertainment Private
Limited - - - 48.00 48.00
% holding
in the class
% holding
in the class
% holding
in the class
% holding in
the class
% holding in
the class
Reliance Land Private
Limited 44.66% 44.66% 44.66% 44.66% 44.66%
Reliance Capital Limited 18.49% 17.57% 17.57% 6.41% -
AAA Entertainment Private
Limited - - - 10.40% 10.40%
(e)
Names of shareholders
holding more than 5% of
Preference share in the
Company
No of
Shares
No of
Shares
No of
Shares No of Shares No of Shares
F-178
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
(In lakhs) (In lakhs) (In lakhs) (In lakhs) (In lakhs)
Reliance Infocomm
Engineering Private Limited 12.00 - - - -
Reliance Utility Engineers
Private Limited 17.50 - - - -
% holding
in the class
% holding
in the class
% holding
in the class
% holding in
the class
% holding in
the class
Reliance Infocomm
Engineering Private Limited 40.68% N.A. N.A. N.A. N.A.
Reliance Utility Engineers
Private Limited 59.32% N.A. N.A. N.A. N.A.
(f) Pursuant to shareholder approval dated March 30, 2012, the authorised share capital of the Company was
reclassified from 1,000 lakh equity shares of ` 5 each to 800 lakh equity shares of ` 5 each and 200 lakh
preference shares of ` 5 each.
(g) Pursuant to shareholder approval dated July 13, 2012, the authorised share capital of the Company was
increased from ` 5,000 lakhs to ` 25,000 lakhs divided into 4,800 lakh equity shares of ` 5 each and 200 lakh
preference shares of ` 5 each.
(h) During Period 2009, the authorised share capital of the Company has been increased as per the provisions of
Scheme of Amalgamation by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each. (refer note 2of IV
of D of Annexure IV)
(i) During the Period 2008, bond holders holding bonds aggregating EURO 633.50 lakhs have opted to convert
their bonds to equity shares. Accordingly, equity shares aggregating to 63.26 lakhs have been issued to them
at a price of ` 543.42 per share (including securities premium of ` 538.42).
F-179
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
a) Securities premium reserve
At the commencement of the
period 46,817.45 47,190.56 46,818.06 63,770.96 24,537.54
Less : Provision for premium on
redemption of Zero Coupon
Foreign Currency Convertible
Bonds ('FCCB') (Also refer note
(c) of B of Annexure IV) - (373.11) 372.50 (244.90) (691.50)
Add : On issuance of equity
shares pursuant to conversion of
FCCB‟s - - - - 34,161.66
Add : Premium on issuance of
preference shares 29,352.50 - - - -
Add : Reversal of provision for
premium on FCCB converted
during the period (Also refer
note (c) of B of Annexure IV) - - - - 7,858.20
Less : Adjustment pursuant to
Modified Composite Scheme of
Amalgamation and
Arrangement (Refer note1 of IV
of D of Annexure IV) - - - - (2,094.94)
Less: Adjustment pursuant to
Scheme of Arrangement for
demerger of Radio business
(refer note 1 of IV of D of
Annexure IV) - - - (16,708.00) -
76,169.95 46,817.45 47,190.56 46,818.06 63,770.96
b) General reserve
At the commencement
of the period 1,195.08 1,195.08 1,195.08 1,195.08 5,584.00
Add : Transfer from Statement
of profit and loss - - - - 11,500.00
Add : Transfer on account of
Scheme of Amalgamation of
Katch 22 (Refer note 3 of V of
D of Annexure IV) - - - - 201.80
Less : Reduction in value of
Companies assets pursuant to
Scheme of Amalgamation of - - - - (2,000.00)
F-180
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Katch 22 Refer note 3 of V of D
of Annexure IV)
Less : Net result of the
transactions relating to Radio
business adjusted pursuant to
Modified Composite Scheme of
Amalgamation and
Arrangement (Refer note 1 of V
of D of Annexure IV) - - - - (14,363.30)
Add : Adjustment pursuant to
Modified Scheme of
Amalgamation and
Arrangement (Refer note 1 of V
of D of Annexure IV) - - - - 272.58
1,195.08 1,195.08 1,195.08 1,195.08 1,195.08
c) Capital reserve
At the commencement of the
period 5,826.20 5,826.20 5,826.20 - -
Amounts transferred to Capital
reserve as per provisions of the
Scheme of Amalgamation
(Refer note 1 of IV of D of
Annexure IV) - - - 5,826.20 -
5,826.20 5,826.20 5,826.20 5,826.20 -
d) Foreign currency translation
reserve
At the commencement of the
period (625.60) (682.51) 532.29 - -
Add: Foreign currency
translation gain / (loss) on non-
integral operations (net) 3,598.65 56.91 (1,214.80) 532.29 -
2,973.05 (625.60) (682.51) 532.29 -
e) Amount pending transfer to
the Securities premium
reserve and / or the General
reserve as per the Composite
Scheme of Amalgamation and
Arrangement (Refer note 1 of
V of D of Annexure IV)
i) Pending transfer to Securities
premium reserve
At the commencement of the - - - - (10,060.33)
F-181
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
period
Reversal due to the Modified
Scheme of Amalgamation and
Arrangement - - - - 7,965.39
Transfer to Securities premium
reserve - - - - 2,094.94
- - - - -
ii) Pending transfer to General
reserve
At the commencement of the
period - - - - 272.58
On merger of E-ONE transfer to
General Reserve - - - - (272.58)
Transfer to General reserve - - - - -
f) (Deficit) / Surplus in
Statement of profit and loss
At the commencement of the
period (38,713.28) (14,365.28) (5,568.28) (631.27) 10,361.56
(Loss) / Profit for the period, as
per Statement of profit and loss (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
Appropriations
Transfer to general reserve - - - - (11,500.00)
Proposed dividend - - - - (1,153.15)
Dividend tax - - - - (196.05)
(109,069.62) (38,713.28) (14,365.28) (5,568.28) (631.27)
Total (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)65502.1
F-182
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-current
assets of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Non-current investments
I Investment in equity
instruments
Subsidiary companies
(non-trade, unquoted and
at cost)
A Reliance MediaWorks
Theatres Limited 5.00 5.00 5.00 5.00 5.00
B Reliance MediaWorks Films
(UK) Limited 8.47 8.47 8.47 8.47 8.47
C Reliance MediaWorks
(USA) Inc. 9.21 9.21 9.21 9.21 9.21
D Reliance MediaWorks
(Netherlands) B.V. 10.40 10.40 10.40 10.40 10.40
E Reliance MediaWorks
(Mauritius) Limited 0.01 0.01 0.01 0.01 0.01
F Big Synergy Media Limited 641.55 641.55 641.55 641.55 641.55
G Rave Entertainment and
Food (Nepal) Private
Limited - 60.00 60.00 60.00 -
H Sri Ramakrishna Theatres
Limited (refer note 7 of I of
D of Annexure IV) - 442.10 442.10 442.10 -
I Reliance MediaWorks
Entertainment Services
Limited 2,005.00 2,005.00 5.00 - -
J Reliance Lowry Digital
Imaging Services Inc. (This
investment constitute 10%
of the outstanding shares
and balance 90% of the
outstanding shares are held
by Reliance MediaWorks
(USA), Inc., a wholly
owned subsidiary of the
Company) 3,000.00 3,000.00 3,000.00 - -
K Reliance Media Consultant
Private Limited 1.00 - - - -
L Rave Entertainment Private
Limited (refer note 2 of IV
of D of Annexure IV for - - - - 515.30
F-183
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-current
assets of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
merger of the subsidiary
with the Company)
M Reliance Broadcast
Networks Limited (refer
note1 of IV of D of
Annexure IV for Scheme of
Arrangement for demerger
of Radio business) - - - - 1,010.00
N Adlabs Multiplex Limited
(refer note 2 of IV of D of
Annexure IV for merger of
the subsidiary with the
Company) - - - - 1,753.50
O Adlabs Multiplex and
Theatres Limited (refer note
2 of IV of D of Annexure
IV for merger of the
subsidiary with the
Company) - - - - 5.00
P Reliance MediaVentures
Private Limited 1.00 - - - -
Joint Ventures (non-trade,
unquoted at cost)
A Cineplex Private Limited
(refer note 8 of I of D of
Annexure IV) - 25.00 25.00 25.00 25.00
B Divya Shakti Marketing
Private limited 329.00 329.00 329.00 329.00 329.00
C Swanston Multiplex
Cinemas Private Limited
(refer note 4 of I of D of
Annexure IV) 825.06 700.06 700.06 700.06 700.06
Less: Provision for
diminution in value of long-
term investments (825.06) - - - -
Others (non-trade,
unquoted at cost)
A Sultan Production Private - - 1.00 1.00 1.00
F-184
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-current
assets of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Limited (refer note 6 of II
of D of Annexure IV)
6,010.64 7,235.80 5,236.80 2,231.80 5,013.50
II Investment in partnership
firm (non-trade, unquoted
at cost)
A HPE / Adlabs LP
(Investment in limited
partnership) (2009 and
2010 : ` 2,366.80 lakhs
towards recovery of
principal pursuant to a
contract and 2010: ` 241.70
lakhs has been repaid by the
Partnership firm as
principal) 1,999.30 1,999.30 1,999.30 2,241.00 4,607.75
Less: Provision for
diminution in value of long
term investments (refer note
2 of IV of D of Annexure
IV) (1,999.30) (1,999.30) (1,999.30) (2,241.00) -
- - - - 4,607.75
III Investment in preference
shares (non-trade,
unquoted at cost)
A Tree of Knowledge DOT
Com Private Limited.# - - - 1,200.00 1,200.00
Less: Provision for
diminution in value of long
term investments (refer note
2 of IV of D of Annexure
IV) - - - (1,200.00) -
Reliance MediaWorks
Entertainment Services
Limited 12,000.00 - - - -
# These shares have been
forfeited during Period 2010 12,000.00 - - - 1,200.00
F-185
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-current
assets of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
IV
Investment in Government
securities (trade, unquoted
and at cost)
Government securities
National savings certificates 30.30 32.50 112.60 102.70 98.20
(pledged with State
government
authorities) 30.30 32.50 112.60 102.70 98.20
Total 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45
Aggregate value of
unquoted investments
20,865.30
9,267.60
7,348.70
5,775.50
10,919.45
Aggregate provision for
diminution in value of
investments 2,824.36 1,999.30 1,999.30 3,441.00 -
B Deferred tax asset
Arising on account of
timing difference in:
Provision for leave
encashment and gratuity 193.10 272.80 127.90 126.40 207.30
Others* 3,246.90 547.50 79.30 583.30 186.10
Unabsorbed depreciation
allowance and carried
forward business loss * - 3,108.90 2,215.00 1,093.90 1,894.30
3,440.00 3,929.20 2,422.20 1,803.60 2,287.70
Deferred tax liability
Arising on account of
timing difference in:
Depreciation/ amortisation 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70
3,440.00 3,929.20 2,422.20 1,803.60 2,287.70
Net deferred tax assets /
liabilities - - - - -
* Restricted to the extent of
deferred tax liability due to
absence of virtual certainty
C Long-term loans and
advances
- Unsecured, considered
F-186
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-current
assets of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
good
I Capital advances 641.10 1,483.80 2,577.50 1,776.90 9,613.49
II Security deposits 13,169.10 16,053.70 16,354.50 16,116.50 14,559.40
III
Capital advance to related
party 98.60 - - - -
IV Loans to others 271.90 206.20 266.11 320.00 385.30
V Advance tax, tax deducted
at source, advance fringe
benefit tax (net of provision
for tax Period 2012 - ` 594.50, Period 2011 - ` 594.50, Period 2010 – ` 594.10, Period 2009
4,392.76, Period 2008 - `
4,097.08) 1,904.20 3,647.00 5,319.80 4,171.14 3,354.42
VI Advance towards
investment (Refer Annexure
XIII) 5,000.00 5,000.00 - - -
VII Others* 1,514.10 935.00 1,130.95 1,485.00 1,044.52
22,599.00 27,325.70 25,648.86 23,869.54 28,957.13
*Prepaid expenses and
entertainment tax paid under
protest
D Other non-current assets
I Interest accrued but not due 22.20 49.00 52.50 49.10 33.44
II Gratuity - 9.80 - - -
III
Balance with bank - Fixed
deposit accounts with
maturity greater than twelve
months 8.40 - - - -
III
Balance with bank - Margin
money deposit* 31.40 231.50 224.92 10.31 10.31
62.00 290.30 277.42 59.41 43.75
* Margin money deposits
are under bank lien for
guarantees given by the
Company
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)
Notes:
F-187
1. Amounts due from parties related to the issuer Company, which has been disclosed in Annexure
XVIII as part of related party disclosures.
2. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose
in the offer document whether any of the receivable are related to directors or promoters or the issuer
in any way. In absence of clarification on “related to the directors or promoters”, Company has
disclosed amounts due from relatives of directors as defined in Schedule IA of the Companies Act,
1956 and in case of promoters, amount due from “Promoter Group” and “Group Companies” as
defined in SEBI ICDR Regulation. The List of persons / entities classified as “Promoter Group” and
“Group Companies” has been determined by the Group and relied upon by the Auditors.
3. Refer note 2 of IV of D of Annexure IV, note 1 of V of D of Annexure IV and note 3 of V of D of
Annexure IV for advances written off pursuant to Schemes.
F-188
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Current investments
I Investment in mutual
fund (non-trade,
unquoted and at lower
of cost and fair value)
Investment in mutual
funds - - 7,902.40 - 13,500.30
- - 7,902.40 - 13,500.30
Market value of current
investment - - 7,906.70 - 13,500.30
B Inventories
(valued at lower cost and
net realisable value) (refer
note 6 of A of Annexure
IV)
I Stores and spares 312.70 357.30 293.90 283.30 44.80
II Chemical stock 36.50 20.70 16.50 33.50 17.20
III Food and beverages 279.10 303.50 238.60 146.90 53.30
IV Raw films 30.20 43.00 47.80 54.60 58.80
V Content not aired - - - - 17.70
658.50 724.50 596.80 518.30 191.80
C Trade receivables
Unsecured, considered
good;
I Debts outstanding for a
period exceeding six
months from the date they
are due for 12,916.10
14,758.90 13,159.70
15,216.30 1,756.20
payments
Other debts 3,263.30 3,983.00 8,959.40 4,986.10 9,883.90
16,179.40 18,741.90 22,119.10 20,202.40 11,640.10
F-189
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Unsecured, considered
doubtful;
II Debts outstanding for a
period exceeding six
months from the date they
are due for payments 2,240.40 681.20 1.90 - 206.60
Other debts - - - - 93.80
2,240.40 681.20 1.90 - 300.40
Less: Provision for
doubtful debts 2,240.40 681.20 1.90 - 300.40
- - - - -
16,179.40 18,741.90 22,119.10 20,202.40 11,640.10
D Cash and bank balances
Cash and cash
equivalents
I Balances with banks
- in current accounts 1,364.40 3,034.50 1,368.30 1,129.00 1,911.60
- in fixed deposit
account with original
maturity less than three
months - - - 186.25 -
II Cash on hand 547.10 166.60 85.20 55.80 77.50
Foreign Currency
denominated preloaded
cards - - - - -
1,911.50 3,201.10 1,453.50 1,371.05 1,989.10
III Other bank balances
- in dividend accounts 10.50 12.20 13.80 14.60 8.20
- in fixed deposit account
maturing with in a year 1.60 10.70 - - -
- in margin money deposit
maturing
with in a year* 4,878.40 5,537.80 3,047.87 2,672.28 5,145.99
4,890.50 5,560.70 3,061.67 2,686.88 5,154.19
6,802.00 8,761.80 4,515.17 4,057.93 7,143.29
F-190
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
*Margin money deposits
are under bank lien for
guarantees given by the
Company
E Short-term loans and
advances
- Unsecured, considered
good
I Amount due from
Reliance Broadcast
Networks Limited
pursuant to demerger of
Radio business - 6,095.00 26,095.00 26,095.00 -
II Loans and advances to
related parties
- subsidiaries 51,155.40 49,844.90 35,877.00 17,729.80 7,622.80
- joint ventures 192.60 391.10 399.20 565.70 706.20
- Advance towards share
application money in a
Joint venture - Swanston
Multiplex Cinemas
Private Limited - 125.00 125.00 - -
III Loans to others 698.90 1,285.80 1,136.69 528.40 13,566.90
IV Deposits 29.40 - - - -
V Others * 3,332.80 4,071.80 6,837.60 5,908.30 9,603.78
55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
- Unsecured, considered
doubtful
I Loans and advances to
related parties -
Subsidiaries 6,921.90 - - - -
Loans to others 393.50 - - - -
II Others* 1,081.50 978.90 120.00 - 65.80
Less: Provision for
doubtful advances 8,396.90 978.90 120.00 - 65.80
- - - - -
55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
F-191
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
*includes service tax
input credit, value added
tax input credit, prepaid
expenses, employee
advance, advances to
vendors etc.
F Other current assets
I Unbilled revenue 561.10 177.30 217.00 125.10 -
II Interest accrued and due
from Reliance Broadcast
Network Limited 63.80 3,930.20 2,481.60 - -
III Interest accrued but not
due 32.70 157.70 66.87 89.58 783.86
IV Other receivables for sale
of investment / Right to
investment 60.00 - - 4,066.80 3,127.30
717.60 4,265.20 2,765.47 4,281.48 3,911.16
The above statement should be read with significant accounting policies and notes to
summary statements, as restated (Annexure IV)
Notes:
1. The list of parties related to directors / promoters (as per SEBI ICDR Regulations, 2009) are as
follows:
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Trade receivables
Reliance Capital Limited 24.98 37.40 43.42 1.63 -
Reliance Capital Asset
Management Limited 28.80 32.29 4.38 0.26 -
Gini & Jony Apparel Private
Limited - 1.23 0.03 0.56 -
TV Today Network Limited - 0.09 - - -
Reliance Equity Advisors (India)
Limited 0.31 - - - -
Reliance Broadcast Network
Limited 1,513.41 1,376.70 1,337.90 - -
Reliance Life Insurance Company
Limited 1.10 0.92 - - -
F-192
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
Particulars
As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Loans, advances and other
receivables
Reliance Broadcast Network
Limited 63.82 10,025.20 28,749.80 26,095.00 -
Reliance Securities Limited - - - -
3,126.90
Reliance General Insurance
Company Limited 0.31 - - - -
Reliance Life Insurance Company
Limited 9.00 9.00 9.00 20.00
-
Total 1,641.73 11,482.83 30,144.53 26,117.45 3,126.90
2. Amounts due from parties related to the issuer Company, have been disclosed in Annexure XVIII
as part of related party disclosures.
3. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose
in the offer document whether any of the receivable are related to directors or promoters or the issuer
in any way. In absence of clarification on “related to the directors or promoters”, Company has
disclosed amounts due from relatives of directors as defined in Schedule IA of the Companies Act,
1956 and in case of promoters, amount due from “Promoter Group” and “Group Companies” as
defined in SEBI ICDR Regulation. The List of persons / entities classified as “Promoter Group” and
“Group Companies” has been determined by the Group and relied upon by the Auditors.
4. Refer note 2 of IV of D of Annexure IV, note 1 of V of D of Annexure IV and note 3 of V of D of
Annexure IV for receivables and advances written off pursuant to Schemes.
F-193
Annexure IX
Reliance MediaWorks Limited
10
Statement of non-current liabilities of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Long-term
borrowings
I Non convertible
debentures (secured) 35,000.00 - - - -
II Non Convertible
Debentures
(Unsecured) 1,650.00 - - - -
III Term loans
- From banks
(secured) 17,262.50 32,370.80 36,416.70 40,000.00 37,500.00
- From banks
(unsecured) - 7,500.00 - - -
- Others (secured) 17,500.00 - - - 2,500.00
IV Zero Coupon Foreign
Currency Convertible
Bonds ('FCCB') - - - 14,230.00 13,099.90
71,412.50 39,870.80 36,416.70 54,230.00 53,099.90
B Other long-term
liabilities
I Lease rent liability as
per AS 19 - "Leases" 3,379.60 2,449.05 1,265.86 787.30 342.98
II Security deposit 136.30 123.14 49.30 51.80 -
III Advance from related
party 120.80 362.50 507.50 - -
3,636.70 2,934.69 1,822.66 839.10 342.98
C Long-term provisions
I Leave encashment 472.80 695.90 344.50 342.50 162.56
II Gratuity 28.30 - - - 35.89
III Premium on
redemption of FCCB - - - 3,084.90 2,839.89
501.10 695.90 344.50 3,427.40 3,038.34
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F-194
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Short-term
borrowings
I Term loans
From banks
(secured) - - - 10,000.00 -
From banks
(unsecured) - 23,500.00 40,000.00 10,000.00 -
II Loans repayable on
demand (secured)
From banks
- Cash credit 554.60 2,500.00 352.60 37.20 293.60
III Loans and advance
from related parties
(unsecured) 550.00 245.00 345.00 245.00 -
IV Other loans and
advances
a From banks
- Buyers credit
(unsecured) - 318.00 1,392.60 926.80 -
- Buyers credit
(secured) 3,974.50 2,966.00 - - -
b Commercial papers
(unsecured) - 57,842.40 72,683.00 49,024.50 38,688.70
c Inter-corporate
deposit (unsecured) 101,345.40 15,000.00 - - 2,046.30
106,424.50 102,371.40 114,773.20 70,233.50 41,028.60
Above includes
Borrowings from
Promoters
98,395.50 15,245.00 345.00 245.00 2,046.30
(as per SEBI ICDR
Regulations, 2009) /
Group companies /
Subsidiaries /
Material Associate
companies
B Other current
liabilities
F-195
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
I Current maturities
of long-term debts 23,383.40 49,045.80 32,307.60 - 0.40
II Interest accrued and
due on borrowings 2,324.30 28.80 - - -
III Interest accrued but
not due on
borrowings 2,222.60 18.30 20.10 30.00 -
IV Unclaimed dividend 10.50 12.20 13.80 14.60 8.20
V Advance received
from customers 1,258.70 1,527.00 1,130.90 731.80 4,936.40
VI Dues for capital
expenditure 2,133.80 3,252.00 3,154.00 2,136.50 399.43
VII Temporary book
overdraft 924.90 - - - -
VII Others * 1,967.20 1,875.48 1,592.02 1,648.33 2,602.03
*including payable
related to employee,
lease rent, expense
payable and
statutory dues. 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46
C Short-term
provisions
I Proposed dividend - - - - 1,153.15
II Tax on proposed
dividend - - - - 196.05
III Gratuity - - - - 104.24
IV Leave encashment 94.00 125.40 31.80 29.30 347.21
94.00 125.40 31.80 29.30 1,800.65
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)
Note: Disclosure as per SEBI ICDR Regulations, 2009 are as follows
F-196
Particulars of
Lenders
Principal Amount
(` in lakhs)
Period when
amount is
outstanding
Interest Rate Repayment
Schedule
Reliance
MediaWorks
Theatres Limited
245.00 Period 2011 and
2009
7.00% Repayable on
demand
Reliance
MediaWorks
Theatres Limited
345.00 Period 2010 7.00% Repayable on
demand
Reliance
MediaWorks
Theatres Limited
550.00 Period 2012 9.50% to 10.25% Repayable on
demand
Reliance Capital
Limited
2,046.30 Period 2008 12.00% Repayable on
demand
Reliance Capital
Limited
15,000.00 Period 2011 12.00% One year from
date of the loan
Reliance Capital
Limited
97,845.50 Period 2012 13.00% One year from
date of the loan
The above statement should be read together with significant accounting policies and notes to summary statements
(Annexure IV).
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F-197
Annexure XI
Reliance MediaWorks Limited
Statement of revenue of the Company
(` in lakhs)
Particulars Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Theatrical exhibition
Sale of tickets 47,893.80 26,272.30 22,401.80 18,147.00 8,378.20
Less: Entertainment tax 8,965.80 3,919.10 2,890.80 1,925.80 1,023.50
38,928.00 22,353.20 19,511.00 16,221.20 7,354.70
Advertisements / sponsorship
revenue 2,980.10 2,117.00 3,819.30 1,245.00 1,281.00
Facilities provided at multiplex 2,203.40 754.70 578.40 525.60 303.30
Food and beverages 13,222.70 7,122.80 5,139.89 3,867.94 1,434.91
Others 1,710.50 1,032.50 1,590.40 328.40 -
59,044.70 33,380.20 30,638.99 22,188.14 10,373.91
Film production services
Processing / printing of films 11,355.30 10,606.10 7,106.40 6,999.60 3,666.20
Equipment / facility rental
income 3,948.80 2,066.60 1,839.40 612.40 265.30
Trading income 1,304.30 1,926.30 2,229.30 3,077.40 2,410.20
Others 150.90 13.60 45.90 67.40 -
16,759.30 14,612.60 11,221.00 10,756.80 6,341.70
Film / content production,
distribution and related
services 325.30 676.40 3,692.00 15,289.40 10,179.10
Total 76,129.30 48,669.20 45,551.99 48,234.34 26,894.71
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
F-198
Annexure XII
Reliance MediaWorks Limited
Statement of other income of the Company
(` in lakhs)
For the period
Particulars Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Recurring
Dividend income from :
- Joint ventures - - - 75.00 55.00
- Subsidiaries 200.40 - 85.30 - -
- Other non-current investments - - - - 7.20
- Current investments - - - 130.40 86.60
200.40 - 85.30 205.40 148.80
Interest income from:
- Bank 613.00 303.60 253.50 344.60 470.70
- Loans, advance and other
deposits 467.10 469.60 152.90 372.10 360.80
1,080.10 773.20 406.40 716.70 831.50
Gain on sale of current investments 39.50 423.60 274.40 269.20 9.10
Bad debts recovered / provisions
written back 79.50 814.00 1,080.90 - -
Sundry balances written back (net) - 306.30 - - -
Foreign exchange gain (net) 2,081.90 349.10 - 1,203.50 -
Miscellaneous income 77.60 250.90 13.20 156.20 758.20
Non recurring
Gain on derivative contracts (net) - - - - 977.40
Gain on sale of non-current
investment / rights therein 766.50 - - 1,700.00 2,660.30
Consultation fees - - - 2,130.50 -
Proceeds from key man insurance
policy - - - 266.40 -
Share of advertisement income - - 1,213.00 - -
Profit on sale of assets / discarding
of assets (net) - 2,701.10 - - -
4,325.50 5,618.20 3,073.20 6,647.90 5,385.30
The above statement should be read together with significant accounting policies and notes to summary statements,
as restated (Annexure IV).
Note
4. The classification of other income by the management into recurring and non-recurring is based on the
current operations and business activities of the Company.
5. Other income is related / incidental to the business activities of the Company.
6. In accordance with the accounting treatment followed by the Company, exchange fluctuation gain / loss
and profit / loss on sale of assets is disclosed net. Gross amounts in respect thereof are not readily
determinable. Hence, net gain where applicable has been considered for the purpose of above disclosure.
F-199
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Central excise
Disputed central excise demand
pending with the Central Excise
and Service Tax Appellate
Tribunal 2,555.90 1,918.40 1,715.30 1,308.80 1,110.90
B Value added tax
Disputed value added tax demand
pending for various states 38.40 - - - -
C Service tax
Disputed Service Tax demand
pending with the Central Excise
and Service Tax Appellate
Tribunal 204.90 - - - -
D Income tax
i) Disputed liability in respect tax
deduction at source, matter is
pending with
Commissioner of Income tax
(Appeals) 1,017.10 1,017.10 - - -
ii) Disputed tax liability in respect of
AY 2008-09 for Rave
Entertainment Private Limited
(„REPL‟), REPL was wholly
owned subsidiary of the Company
and merged with it with effect
from April 1, 2008. Department‟s
appeal against order of
Commissioner of Income Tax
(Appeals) is pending with Income
Tax Appellant Tribunal (ITAT). In
Period 2011 the same was pending
with Commissioner of Income Tax
(Appeals). 1,401.20 1,401.20 - - -
F-200
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Further Company has received
demand in respect of REPL matter
for assessment year
2009-10, appeal is pending with
Commissioner of Income tax
(Appeals) - - - - 1,787.20
E Entertainment tax
i) In respect of certain multiplexes,
the Company has made an
application for availing exemption
under the relevant Act
retrospectively from the date of
commencement of the operations
of the said multiplex and the
application is pending approval
300.70 219.40 340.00 391.30 280.30
ii) In respect of certain multiplexes,
the Company is in dispute with the
entertainment tax authorities
regarding eligibility for availing
exemption under the relevant Act. 509.60 558.80 451.70 293.40 219.40
iii) In respect of demand orders
received for payments of
entertainment tax collected and not
paid to the authorities, the
Company has made an appeal
against said demand orders as it
believes that the same is not
payable, being exemption from
payment available to it - 113.20 107.50 62.90 56.90
iv) The Company shall be liable to pay
the entertainment tax in the event
that the multiplexes do not
continue operations for a period of
10 years from the respective dates
from which they commenced their
operations 12,845.00 11,125.20 10,614.90 5,747.50 4,404.40
F-201
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
F The Company has engaged the
services of a Contractor for the
purpose of deploying personnel at
its cinemas. During the tenure of
the contract, the Company has paid
the Contractor, amounts payable
towards employers contribution to
provident fund (PF) amounting to
` 294.20 lakhs on a regular basis.
The Company has learnt that the
Contractor has failed to deposit
appropriate amounts for employee
and employer contributions
amounting to approximately `
588.40 lakhs with the PF
authorities and the Company
apprehends that some portion of
the aforesaid amount which was
supposed to be deposited in the
individual accounts of the
Personnel by the Contractor may
have actually been mis-
appropriated by the Contractor.
The Company has filed a criminal
complaint against the Contractor
and the matter is currently under
investigation. The Company has
not received any claims in this
regard.
G Claims against Company not
acknowledged as debts 7,859.80 198.60 74.00 74.00 74.00
H Guarantees
Guarantee given to Ministry of
information broadcasting of Radio
license - - - 2,302.00 -
Guarantees given to bank and
others for loans / credit facilities
given to Subsidiary Companies 14,489.80 10,518.00 17,689.60 11,258.40 -
Guarantees given to bank for loans
/ credit facilities given to Others 183.00 - - - -
F-202
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Guarantee given to a Service
providers in respect of Subsidiary
Companies 4,944.40 4,254.00 4,218.10 33.70 -
I Value added tax:
Value added tax: The Maharashtra
Value Added Tax Act, 2002 lists
the Scheduled entry, interalia,
“Copy right” w.e.f. 1 April 2005.
Pursuant to this enactment /
scheduled entry, the entertainment
industry has made a written
representation to the Finance
Minister, Maharashtra for deletion
of the scheduled entry from the
Act. Similar representation was
made by the industry in some other
states, as a result of which the Act
was modified to delete this
scheduled entry. The Company is
awaiting a positive response from
the Ministry of Finance in respect
of the assurance given.
Accordingly, no provision (amount
not currently ascertainable) has
been made in the books of
accounts.
With effect from the May 1, 2011
the Maharashtra Value Added Tax
Act, 2002 was amended to exempt
tax on Copyrights for distribution
and exhibition of cinematographic
films in theatres and cinema halls.
J Capital Commitment
i) Estimated amount of contract
remaining to be executed on
capital account and not provided
for net of advances (for fixed
assets) 4,512.20 4,646.74 11,858.30 5,661.80 13,409.70
F-203
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
ii) Estimated amount of contract
remaining to be executed on
capital account and not provided
for net of advances (for
investments) 1,200.00 1,200.00 - - -
iii) Amount of uncalled on 150,000
partly paid preference shares of
Tree of Knowledge DOT COM
Private Limited - - - 300.00 300.00
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Note :-
a) The Company is a party to various legal proceedings in the normal course of business and does not expect the
outcome of these proceedings to have any adverse effect on its financial conditions, results of operations or cash
flows.
b) The amounts are excluding penalty and interest if any that would be levied at the time of final conclusion.
Other Commitment :-
a) Company has issued letter of financial support to some of its wholly owned foreign subsidiaries.
b) In view of the loss during the period, the Company has not created Debenture Redemption Reserve in terms
of Section 117 (C) of the Companies Act, 1956. The Company shall create such reserve out of profit, if any in
future years.
c) Preference shares shall be redeemed at the end of 20 years from the date of allotment. Each Preference shares
shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a. (till date of
redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend, if declared
during the tenure. However, the premium on redemption will be paid only to the original subscribers or to the
transferees if the transfers have been previously approved by the Company. Yield on preference shares of `
1,487.10 lakhs for Period 2012 will be paid as premium at the time of redemption.
F-204
Annexure XIV
Reliance MediaWorks Limited
Summary of accounting ratios of the Company
(` in lakhs)
Particulars
Period
2012
Period
2011 Period 2010 Period 2009 Period 2008
1 Net (loss) / profit after tax, as
restated (70,356.34)
(24,348.00) (8,797.00) (4,937.01) 1,856.37
2 Weighted average number of
equity shares outstanding during
the Period for basic earnings per
share 46,126,170 46,126,170 46,126,170 46,126,170 42,103,935
3 Add - equity share issuable on
conversion of FCCB (Refer note
5 of II of D of Annexure IV) - 1,694,699 2,061,884 2,061,884 6,084,140
4 Weighted average number of
equity share outstanding during
the Period for dilutive earnings
per share (Refer note 5 of II of D
of Annexure IV) 46,126,170 47,820,869 48,188,054 48,188,054 48,188,075
5 Number of equity shares
outstanding at the end of the
Period 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170
6 Paid up value of each equity
share 5.00 5.00 5.00 5.00 5.00
7 Total paid capital – equity 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
8 Reserves and surplus (net of
deficit in statement of profit and
loss) (excluding revaluation
reserve) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
9 Net worth attributable to equity
shareholders (7+8) (20,599.03) 16,806.16 41,470.36 51,109.66 66,641.08
Accounting ratios
a) Earnings per share
Basic earnings per share (152.53) (52.79) (19.07) (10.70) 4.41
Diluted earnings per share (152.53) (52.79) (19.07) (10.70) 3.85
F-205
Annexure XIV
Reliance MediaWorks Limited
Summary of accounting ratios of the Company
(` in lakhs)
Particulars
Period
2012
Period
2011 Period 2010 Period 2009 Period 2008
b) Return of net worth NA (144.88)% (21.21)% (9.66)% 2.79%
c) Net assets value per share (44.66) 36.44 89.91 110.80 144.48
Note
1 The ratios have been
computed as under :-
Basic and diluted earning per
share
Net profit / (loss) after tax, as restated, excluding extraordinary
items attributable to equity shareholders
Weighted average number of equity share outstanding during the
period
Return on Net worth %
Net profit / (loss) after tax, as restated, excluding extraordinary
items attributable to equity shareholders
Net worth, as restated, excluding revaluation reserve at the end of
the period
Net assets value per share (`)
Net worth, as restated, excluding revaluation reserve at the end of
the period
Number of equity share outstanding at the end of the period
2 Restated net profit as appearing in the restated statement of profit and loss and net worth as appearing in
summary statement of assets and liabilities, as restated, has been considered for the purpose of computing the
above ratios.
3 Calculation of ratios post issue has not been considered.
4 Earnings per share calculations are done in accordance with Accounting Standard 20 "Earning Per Share",
notified in the Companies (Accounting Standards) Rules, 2006.
5 The above statement should be read together with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
6 Dilutive EPS has not been presented in Period 2009, Period 2010 and Period 2011, since it is anti dilutive.
7 Return on net worth for the Period 2012 cannot be computed as net worth as on September 30, 2012 is
negative.
8 Dividend on preference capital is non-cumulative. Yield of ` 1,487.10 lakhs for the period will be paid as
premium at the time of redemption and shall be adjusted against securities premium reserve. Accordingly, the
same is not adjusted for the purpose of calculating the above ratios.
F-206
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
1. Commercial Papers / Short Term Loans from Banks (unsecured)
A Templeton Mutual Fund (Refer
note 9 of Annexure XV)
-
21,984.79 - - -
B ICICI Prudential Fund (Refer note
9 of Annexure XV)
-
9,943.51 - - -
C Templeton Mutual Fund (Refer
note 9 of Annexure XV)
-
9,422.16 - - -
D Yes Bank Limited (Refer note 9 of
Annexure XV)
-
11,619.63 - - -
E BNP Paribas (Refer note 9 of
Annexure XV)
- 4,872.31 - - -
F LIC MF Savings Plus Fund - - 7,450.18 - -
G LIC MF Income Plus - - 9,832.06 - -
H LIC MF Floating Rate - - 983.21 - -
I LIC MF Savings Plus Fund - - 9,808.90 - -
J J M Financial Mutual Fund - - 2,477.40 - -
K J M Financial Mutual Fund - - 1,486.43 - -
L LIC MF Income Plus - - 9,599.87 - -
M LIC MF Savings Plus Fund - - 9,599.87 - -
N IFCI Limited - - 2,466.68 - -
O LIC MF Floating Rate - - 4,744.82 - -
P LIC MF Savings Plus Fund - - 4,744.53 - -
Q LIC MF Income Plus - - 9,489.05 - -
R Yes Bank Limited - - - 14,886.41 -
S IDBI Limited - - - 2,457.18 -
T SIDBI - - - 491.44 -
U Canara Bank - - - 2,456.18 -
V IFCI Limited - - - 4,893.69 -
W LIC MF Floating Rate Fund - - - 4,767.92 -
X LIC MF Income Plus Fund - - - 4,767.92 -
F-207
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Y LIC MF Liquid Fund - - - 4,767.92 -
Z LIC MF Savings Plus Fund - - - 4,767.92 -
AA LIC MF Special unit scheme
Special Unit Scheme
- - - 4,767.92 -
AB UTI Mutual Funds - liquid cash
plan
- - - - 1,973.16
AC ABN Amro Money Plus Fund - - - - 4,932.89
AD Lotus India Liquid Fund - - - - 1,973.16
AE Birla Sun Life Interval Income
Fund Quarterly Plan Series II - - - -
5,297.62
AF Kotak Quarterly Interval Plan -
Series 66 - - - - 2,408.01
AG Allahabad Bank - - - - 1,965.13
AH Birla Cash Plus - - - - 4,421.54
AI United Bank Of India - - - - 3,438.97
AJ UTI Spread Fund - - - - 2,456.41
AK Saraswat Co-op Bank Ltd. - - - - 982.42
AL SBI Life Insurance Co. Ltd. - - - - 2,456.04
AM Tata MF - Tata Fixed Horizon
Fund
- - - - 3,928.19
AN ABN Amro Flexi Short Term Plan
- Series B - - - - 2,455.16
AO Kotak Mahindra Flexi Debt
Scheme - - - - -
AP Birla Cash Plus - - - - -
AQ Allahabad Bank - - 10,000.00 10,000.00 -
AR Syndicate Bank - 10,000.00 10,000.00 - -
AS Union Bank of India - 10,000.00 10,000.00 - -
AT Bank of Baroda - - 10,000.00 - -
AU Yes Bank Limited - 3,500.00 - - -
Sub total - 81,342.40 112,683.00 59,024.50 38,688.70
2. Unsecured Long Term Loan from Bank / others (including amounts due within the next 1 year)
A Canara Bank - 20,000.00 - - -
- B DBS Bank Limited (Refer note 9
of Annexure XV)
- 15,000.00 - - -
F-208
C Non-convertible debentures 3,850.00 - - - -
Sub total 3,850.00 35,000.00 - - -
3. Secured Short Term Loan From Bank
A Syndicate Bank (Refer note 6 of
Annexure XV) - - - 10,000.00 -
Sub total - - - 10,000.00 -
4. Secured Long Term Loan From Bank / Other Long Term Loan (including amounts due within the next
1 year)
A Allahabad Bank (Refer note 1 of
Annexure XV)*
* 1,666.67 3,333.33 5,000.00 5,000.00 -
B Exim Bank (Refer note 1 of
Annexure XV) * 2,333.34 4,666.68 7,000.00 7,000.00 -
C Jammu & Kashmir Bank (Refer
note 1 of Annexure XV) * 2,333.34 4,666.68 7,000.00 7,000.00 -
D Syndicate Bank (Refer note 1 of
Annexure XV) * 2,333.34 4,666.68 7,000.00 7,000.00 -
E Union Bank of India (Refer note 1
of Annexure XV) * 2,000.00 4,000.00 6,000.00 6,000.00 -
F Vijaya Bank (Refer note 1 of
Annexure XV) * 2,666.67 5,333.33 8,000.00 8,000.00 -
G Rank Investments Private Limited
(Refer note 1 of Annexure XV) - - - - 2,500.00
H Barclays Bank Plc (Refer note 1
of Annexure XV) - - - - 37,500.00
I Syndicate Bank (Refer note 6 of
Annexure XV) - 6,250.00 10,000.00 - -
J Syndicate Bank (Refer note 1 of
Annexure XV)
10,312.50
15,000.00 - - -
K Union Bank of India (Refer note 1
of Annexure XV) 4,800.00 6,000.00 3,500.00 - -
L Syndicate Bank (Refer note 1 of
Annexure XV) 10,000.00 - - - -
M Non Convertible Debentures
(Refer note 10 of Annexure XV) 35,000.00 - - - -
N Indiabulls Financial Service
Limited (Refer note 11 of
Annexure XV)
17,500.00
- - - -
Sub total 90,945.86 53,916.70 53,500.00 40,000.00 40,000.00
* - As per agreement dated June 28, 2008 for long term loan obtained from banks, the Company has to comply with
covenants with regards to financial parameters, as specified in the agreement. Based on Period 2009, 2010, 2011 and
2012 financials, the Company is not in compliance with the debt covenants.
5. Overdraft facilities / Car loan
F-209
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
No
Particulars As at
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
A Cash credit - Bank of Baroda
(Refer note 2, 4,6 and 12 of
Annexure XV) 554.63 540.53 352.60 37.20 293.60
B Cash credit – Axis Bank (Refer
note 5 and 12 of Annexure XV) - 1,959.47 - - -
C Car loan (Refer note 3 of
Annexure XV)
-
- - - 0.40
D Buyers credit (Refer note 7 and 12
of Annexure XV)
3,974.48
2,965.90 - - -
Sub Total 4,529.11 5,465.90 352.60 37.20 294.00
6. Others (Unsecured) (including amounts due within the next 1 year)
A Zero Coupon Foreign Currency
Convertible Bonds (Refer note 8
of Annexure XV)
- - 15,224.30 14,230.00 13,099.90
B Inter corporate deposits 101,895.43 15,245.00 345.00 245.00 2,046.30
C Buyers credit - 318.00 1,392.60 926.80 -
Subtotal 101,895.43 15,563.00 16,961.90 15,401.80 15,146.20
Grand total 201,220.40 191,288.00 183,497.50 124,463.50 94,128.90
Period 2012
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Allahabad Bank *
1,666.67
13.25% per annum ` 1,666.67 Due on
March 31, 2013
Exim Bank *
2,333.34
13.25% per annum ` 2,333.34 Due on
March 31, 2013
Jammu & Kashmir Bank *
2,333.34
13.25% per annum ` 2,333.34 Due on
March 31, 2013
Syndicate Bank *
2,333.34
13.25% per annum ` 2,333.34 Due on
March 31, 2013
Union Bank of India *
2,000.00
13.25% per annum ` 2,000.00 Due on
March 31, 2013
Vijaya Bank *
2,666.67
13.25% per annum ` 2,666.67 Due on
March 31, 2013
Union Bank of India 4,800.00
14.00% per annum ` 400 .00 - 20 equal
quarterly instalment
starting from March 31,
2012
F-210
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Syndicate Bank
10,312.50
13.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from September
14, 2011
Syndicate Bank
10,000.00
11.75% per annum ` 2,500.00 - 4 equal
quarterly instalment
starting from September
14, 2013
Non Convertible Debentures
35,000.00
11.00% per annum
Coupon
Series 1 - ` 10,000
lakhs – March 1, 2014
Series 2 - ` 12,500
lakhs – March 1, 2015
Series 3 - ` 12,500
lakhs – March 1, 2016
Non Convertible debentures
3,850.00
12.50% per annum All series of ` 550 lakhs
Series B – December
10, 2012
Series C – March 10,
2013
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December 10,
2013
Series G – March 10,
2014
Series H – June 10,
2014
Buyers Credit
3,974.48
Libor Linked –
Various
Various Dates
Inter Corporate Deposit - Magma Fincorp
Limited 2,200.00
12.00% per annum March 26, 2013
Inter Corporate Deposit - Magma Fincorp
Limited 1,300.00
12.00% per annum April 29, 2013
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 550.00
9.50% - 10.25% per
annum
Repayable on demand
Inter-corporate deposit – Reliance Capital
Limited 97,845.40
13.00% per annum Various Dates
Indiabulls Financial Services Limited
17,500.00
12.79% per annum 6 equal monthly
instalments starting the
13th
month from the
date of disbursement
Bank of Baroda (cash credit) 554.63 13.50% per annum Repayable on demand
Total 201,220.40
* - Details of delayed repayment of loans:
F-211
Nature of loan Principal amount (` in
lakhs)
Due date Date of payment
Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012
Secured term loan 13,333.33 March 31, 2012 May 11, 2012
Secured term loan 1,250.00 December 16, 2011 December 30, 2011
Secured term loan 1,000.00 May 3, 2012 May 6, 2012
Period 2011
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Templeton Mutual Fund 21,984.79 11.75% per annum June 15, 2011
ICICI Prudential Fund 9,943.51 11.15% per annum April 20, 2011
Templeton Mutual Fund 9,422.16 11.75% per annum October 12, 2011
Yes Bank Limited 11,619.63 11.75% per annum November 25, 2011
BNP Paribas Mutual Fund
4,872.31 12.00% per annum June 20, 2011
Allahabad Bank
3,333.33
10.25% per annum ` 1,666.67 Due on
March 31, 2012. `
1,666.67 Due on March
31, 2013
Exim Bank
4,666.68
10.25% per annum ` 2,333.34 Due on
March 31, 2012. `
2,333.34 Due on March
31, 2013
Jammu & Kashmir Bank
4,666.68
10.25% per annum ` 2,333.34 Due on
March 31, 2012. `
2,333.34 Due on March
31, 2013
Syndicate Bank
4,666.68
10.25% per annum ` 2,333.34 Due on
March 31, 2012. `
2,333.34 Due on March
31, 2013
Union Bank of India
4,000.00
10.25% per annum ` 2,000.00 Due on
March 31, 2012. `
2,000.00 Due on March
31, 2013
Vijaya Bank
5,333.33
10.25% per annum ` 2,666.67 Due on
March 31, 2012. `
2,666.67 Due on March
31, 2013
Syndicate Bank
6,250.00
12.00% per annum ` 1,250.00 - 8 equal
quarterly instalment
started from September
17, 2010
F-212
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Union Bank of India
6,000.00
13.00% per annum ` 400.00 - 20 equal
quarterly instalment
starting from March 31,
2012
Syndicate Bank
15,000.00
12.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from September
14, 2011
Canara Bank 12,500.00 11.50% per annum March 28, 2012
7,500.00 11.50% per annum May 15, 2012
Syndicate Bank 10,000.00 9.00% per annum May 27, 2011
Union Bank of India 10,000.00 10.50% per annum May 23, 2011
Yes Bank Limited 3,500.00 12.50% per annum May 27, 2011
DBS Bank Limited 15,000.00 11.40% per annum January 24, 2012
Buyers Credit
3,283.90
Libor Linked –
Various
Various Dates
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 245.00
7.00% per annum Repayable on demand
Inter-corporate deposit – Reliance Capital
Limited 15,000.00
12.00% per annum March 28, 2012
Bank of Baroda (cash credit) 540.53 11.00% per annum Repayable on demand
Axis Bank (cash credit) 1,959.47 12.75% per annum Repayable on demand
Total 191,288.00
Period 2010
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
LIC MF Savings Plus fund 7,450.18 6.60% per annum May 10, 2010
LIC MF Income Plus 9,832.06 5.50% per annum July 26, 2010
LIC MF Floating Rate 983.21 5.50% per annum July 26, 2010
LIC MF Savings Plus Fund 9,808.90 5.50% per annum August 11, 2010
J M Financial Mutual Fund 2,477.40 6.30% per annum May 25, 2010
J M Financial Mutual Fund 1,486.43 6.30% per annum May 25, 2010
LIC MF Income Plus 9,599.87 6.25% per annum December 3, 2010
LIC MF Savings Plus Fund 9,599.87 6.25% per annum December 3, 2010
IFCI Limited 2,466.68 7.75% per annum June 4, 2010
LIC MF Floating Rate 4,744.82 7.25% per annum December 29, 2010
LIC MF Savings Plus 4,744.53 7.25% per annum December 29, 2010
LIC MF Income Plus 9,489.05 7.25% per annum December 29, 2010
Allahabad Bank
5,000.00
10.75% per annum ` 1,666.67 Due on
March 31, 2011. `
F-213
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
1,666.67 Due on March
31, 2012 ` 1,666.67
Due on March 31, 2013
Exim Bank
7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on March
31, 2012 ` 2,333.34
Due on March 31, 2013
Jammu & Kashmir Bank
7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on March
31, 2012 ` 2,333.34
Due on March 31, 2013
Syndicate Bank
7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on March
31, 2012 ` 2,333.34
Due on March 31, 2013
Union Bank of India
6,000.00
10.75% per annum ` 2,000.00 Due on
March 31, 2011. `
2,000.00 Due on March
31, 2012 ` 2,000.00
Due on March 31, 2013
Vijaya Bank
8,000.00
10.75% per annum ` 2,666.67 Due on
March 31, 2011. `
2,666.67 Due on March
31, 2012 ` 2,666.67
Due on March 31, 2013
Syndicate Bank
10,000.00
10.00% per annum ` 1250.00 - 8 equal
quarterly instalment
starting from September
17, 2010
Union Bank of India
3,500.00
11.00% per annum ` 400 - 20 equal
quarterly instalment
starting from March 31,
2012
Allahabad Bank 10,000.00 7.75% per annum September 24, 2010
Syndicate Bank 10,000.00 7.50% per annum June 22, 2010
F-214
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Union Bank of India 10,000.00 7.00% per annum June 11, 2010
Bank of Baroda 10,000.00 7.75% per annum July 10, 2010
Buyers Credit
1,392.60
Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of
Annexure XV) 15,224.30
- January 25, 2011
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 345.00
7% per annum Repayable on demand
Bank of Baroda (cash credit) 352.60 11.00% per annum Repayable on demand
Total 183,497.50
Period 2009
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Yes Bank Limited 14,886.41 9.75% per annum April 30, 2009
IDBI Limited 2,457.18 10.00 % per annum June 4, 2009
SIDBI 491.44 10.00 % per annum June 4, 2009
Canara Bank 2,456.18 10.25 % per annum June 4, 2009
IFCI 4,893.69 10.20 % per annum June 18, 2009
LIC MF Floating Rate Fund 4,767.92 10.75 % per annum September 14, 2009
LIC MF Income Plus Fund 4,767.92 10.75 % per annum September 14, 2009
LIC MF Liquid Fund 4,767.92 10.75 % per annum September 14, 2009
LIC MF Savings Plus Fund 4,767.92 10.75% per annum September 14, 2009
LIC MF Special Unit Scheme 4,767.92 10.75% per annum September 14, 2009
Allahabad Bank – Secured loan 5,000.00 10.75% per annum ` 1,666.67 Due on
March 31, 2011. `
1,666.67 Due on March
31, 2012 ` 1,666.67
Due on March 31, 2013
Exim Bank 7,000.00 10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on March
31, 2012 ` 2,333.34
Due on March 31, 2013
Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on March
31, 2012 ` 2,333.34
Due on March 31, 2013
F-215
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Syndicate Bank – Secured loan 7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on March
31, 2012 ` 2,333.34
Due on March 31, 2013
Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 Due on
March 31, 2011. `
2,000.00 Due on March
31, 2012 ` 2,000.00
Due on March 31, 2013
Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 Due on
March 31, 2011. ` 2,666.67 Due on March
31, 2012 ` 2,666.67
Due on March 31, 2013
Syndicate Bank – Unsecured loan 10,000.00 13.50% per annum December 31, 2009
Allahabad Bank – Unsecured loan 10,000.00 13.50% per annum January 8, 2010
Buyers Credit 926.80 Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of
Annexure XV) 14,230.00
- January 25, 2011
Inter-corporate deposit - Reliance MediaWorks
Theatres Limited
245.00 7.00% per annum Repayable on demand
Bank of Baroda (cash credit) 37.20 11.00% per annum Repayable on demand
Total 124,463.50
Period 2008
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
UTI Mutual Funds - liquid cash plan 1,973.16 10.25% per annum May 20, 2008
ABN Amro Money Plus Fund 4,932.89 10.25% per annum May 20, 2008
Lotus India Liquid Fund# 1,973.16 10.25% per annum May 20, 2008
Birla Sunlife Interval Income Fund 5,297.62 10% per annum August 20, 2008
Kotak Quarterly Interval Plan - Series 6 2,408.01 10% per annum August 20, 2008
Allahabad Bank 1,965.13 10.20 % per annum June 4, 2008
Birla Cash Plus 4,421.54 10.20 % per annum June 4, 2008
United Bank Of India 3,438.97 10.20 % per annum June 4, 2008
UTI Spread Fund 2,456.41 10.20% per annum June 4, 2008
Saraswat Co-op Bank Ltd. 982.42 10.28% per annum June 4, 2008
F-216
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
SBI Life Insurance Co. Ltd. 2,456.04 10.28% per annum June 4, 2008
Tata MF - Tata Fixed Horizon Fund 3,928.19 10.50% per annum June 4, 2008
ABN Amro Flexible Short Term Plan - Series
B
2,455.16
10.50% per annum June 4, 2008
Rank Investments Private Limited 2,500.00 10.75% per annum ` 833.34 Due on March
31, 2011. ` 833.34
Due on March 31, 2012
` 833.32 Due on March
31, 2013
Barclays Bank Plc 37,500.00 10.75% per annum ` 12,500.00 Due on
March 31, 2011. ` 12,500.00 Due on
March 31, 2012 ` 12,500.00 Due on
March 31, 2013
ICICI (car loan) 0.40 Various rates As per schedule
Zero Coupon FCCB (Refer note 8 of
Annexure XV)
13,099.90 - January 25, 2011
Inter Corporate Deposit – Reliance Capital
Limited
2,046.30 12.00% per annum Repayable on demand
Bank of Baroda (cash credit) 293.60 11.25% per annum Repayable on demand
Total 94,128.90
Commercial Paper:
Details of Terms of Discount rate and repayment schedule of Commercial papers are set out below:
Period 2011
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Templeton MF (4,500 commercial paper of face value `
500,000 each dated December 28, 2010 aggregating to `
22,500 lakhs)
21,984.79 Issued at `
21,339.08 lakhs,
discount rate 11.75
% per annum
June 15, 2011
ICICI Prudential Mutual Fund (2,000 commercial paper of
face value ` 500,000 each dated January 20, 2011
aggregating to ` 10,000 lakhs)
9,943.51 Issued at `
9,732.42 lakhs,
discount rate 11.15
% per annum
April 20,
2011
Templeton MF (2,000 commercial paper of face value `
500,000 each dated February 3, 2011 aggregating to ` 10,000 lakhs)
9,422.16 Issued at `
9,252.39 lakhs,
discount rate 11.75
% per annum
October 12,
2011
Yes Bank Ltd (2500 commercial paper of face value ` 500,000 each dated February 25, 2011 aggregating to ` 12,500 lakhs)
11,619.63 Issued at `
11,490.20 lakhs,
discount rate 11.75
November
25, 2011
F-217
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
% per annum
BNP Paribas Mutual Fund (1000 commercial paper of face
value ` 500,000 each dated March 21, 2011 aggregating to
` 5,000 lakhs)
4,872.31 Issued at `
4,854.75 lakhs,
discount rate 12.00
% per annum
June 20, 2011
Total 57,842.40
Period 2010
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Savings Plus (1,500 commercial paper of face
value ` 500,000 each dated June 3, 2009 aggregating to ` 7,500 lakhs)
7,450.18 Issued at ` 7,064.41 lakhs,
discount rate 6.60
% per annum
May 10, 2010
LIC MF Income Plus (2,000 commercial paper of face value
` 500,000 each dated October 28, 2009 aggregating to ` 10,000 lakhs)
9,832.06 Issued at ` 9607.67 lakhs,
discount rate 5.50
% per annum
July 26, 2010
LIC MF Floating Rate (200 commercial paper of face value
` 500,000 each dated October 28, 2009 aggregating to ` 1,000 lakhs)
983.21 Issued at ` 960.77
lakhs, discount rate
5.50 % per annum
July 26, 2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated November 13, 2009 aggregating
to ` 10,000 lakhs)
9,808.90 Issued at ` 9607.67 lakhs,
discount rate 5.50
% per annum
August 11,
2010
J M Financial Mutual Fund (500 commercial paper of face
value ` 500,000 each dated November 25, 2009 aggregating
to ` 2,500 lakhs)
2,477.40 Issued at ` 2424.26
lakhs, discount rate
6.30 % per annum
May 25, 2010
J M Financial Mutual Fund (300 commercial paper of face
value ` 500,000 each dated November 30, 2009 aggregating
to ` 1,500 lakhs)
1,486.43 Issued at ` 1455.78 lakhs,
discount rate 6.30
% per annum
May 25, 2010
LIC MF Income Plus (2,000 commercial paper of face value
` 500,000 each dated January 29, 2010 aggregating to ` 10,000 lakhs)
9,599.87 Issued at ` 9499.02 lakhs,
discount rate 6.25
% per annum
December 3,
2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated January 29, 2010 aggregating to
` 10,000 lakhs)
9,599.87 Issued at ` 9499.02 lakhs,
discount rate 6.25
% per annum
December 3,
2010
IFCI Ltd. (2,000 commercial paper of face value ` 500,000
each dated January 29, 2010 aggregating to ` 10,000 lakhs)
2,466.68 Issued at ` 2452.10
lakhs, discount rate
7.75 % per annum
June 4, 2010
LIC MF Floating Rate (1000 commercial paper of face
value ` 500,000 each dated March 9, 2010 aggregating to ` 5,000 lakhs)
4,744.82 Issued at ` 4723.24
lakhs, discount rate
7.25 % per annum
December 29,
2010
LIC MF Savings Plus (1000 commercial paper of face value
` 500,000 each dated March 15, 2010 aggregating to `
5,000 lakhs)
4,744.53 Issued at ` 4728.56
lakhs, discount rate
7.25 % per annum
December 29,
2010
LIC MF Income Plus (2000 commercial paper of face value 9,489.05 Issued at ` 9457.12 December 29,
F-218
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
` 500,000 each dated March 15, 2010 aggregating to `
10,000 lakhs)
lakhs, discount rate
7.25 % per annum
2010
Total 72,683.00
Period 2009
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Yes Bank Limited (3,000 commercial paper of face
value ` 500,000 each dated February 3, 2009
aggregating to ` 15,000 lakhs)
14,886.41 Issued at ` 14,663.14
lakhs, discount rate
9.75 % per annum
April 30,
2009
IDBI Limited (500 commercial paper of face value `
500,000 each dated March 9, 2009 aggregating to `
2500 lakhs)
2,457.18 Issued at ` 2,441.80
lakhs, discount rate
10.00 % per annum
June 4, 2009
SIDBI (100 commercial paper of face value ` 500,000
each dated March 9, 2009 aggregating to ` 500 lakhs)
491.44 Issued at ` 488.36
lakhs, discount rate
10.00 % per annum
June 4, 2009
Canara Bank ( 500 commercial paper of face value `
500,000 each dated March 6, 2009 aggregating to `
2,500 lakhs)
2,456.18 Issued at ` 2,438.37
lakhs, discount rate
10.25% per annum
June 4, 2009
IFCI (1,000 commercial paper of face value ` 500,000
each dated March 20, 2009 aggregating to ` 5,000 lakhs)
4,893.69 Issued at ` 4,877.33
lakhs, discount rate
10.20% per annum
June 18,
2009
LIC MF Floating Rate Fund (1,000 commercial paper of
face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Income Plus Fund (1,000 commercial paper of
face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Liquid Fund (1,000 commercial paper of face
value ` 500,000 each dated March 17, 2009 aggregating
to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Savings Plus Fund (1,000 commercial paper of
face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Special Unit Scheme (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
Total 49,024.50
Period 2008
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
UTI Mutual Funds - liquid cash plan (400 commercial
paper of face value ` 500,000 each dated February 20,
2008 aggregating to ` 2,000 lakhs)
1,973.16 Issued at ` 1,950.70
lakhs, discount rate
10.25% per annum
May 20,
2008
ABN Amro Money Plus Fund (1,000 commercial paper
of face value ` 500,000 each dated February 20, 2008
aggregating to ` 5,000 lakhs)
4,932.89 Issued at ` 4,876.74
lakhs, discount rate
10.25 % per annum
May 20,
2008
Religare Mutual Fund* (400 commercial paper of face 1,973.16 Issued at ` 1,950.70 May 20,
F-219
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
value ` 500,000 each dated February 20, 2008
aggregating to ` 2,000 lakhs)
lakhs, discount rate
10.25 % per annum
2008
Birla Sunlife Interval Income Fund Quarterly Plan
Series II (1,100 commercial paper of face value `
500,000 each dated February 20, 2008 aggregating to `
5,500 lakhs)
5,297.62 Issued at ` 5,238.78
lakhs, discount rate
10.00% per annum
August 20,
2008
Kotak Quarterly Interval Plan - Series 6 (500
commercial paper of face value ` 500,000 each dated
February 20, 2008 aggregating to ` 2,500 lakhs)
2,408.01 Issued at ` 2,381.26
lakhs, discount rate
9.20% per annum
August 20,
2008
Allahabad Bank (400 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
2,000 lakhs)
1,965.13 Issued at ` 1,949.87
lakhs, discount rate
10.20% per annum
June 4, 2008
Birla Cash Plus (900 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
4,500 lakhs)
4,421.54 Issued at ` 4,387.21
lakhs, discount rate
10.20% per annum
June 4, 2008
United Bank Of India (700 commercial paper of face
value ` 500,000 each dated March 4, 2008 aggregating
to ` 3,500 lakhs)
3,438.97 Issued at ` 3,412.27
lakhs, discount rate
10.20% per annum
June 4, 2008
UTI Spread Fund (500 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
2,500 lakhs)
2,456.41 Issued at ` 2,437.34
lakhs, discount rate
10.20% per annum
June 4, 2008
Saraswat Co-op Bank Ltd. (200 commercial paper of
face value ` 500,000 each dated March 7, 2008
aggregating to ` 1,000 lakhs)
982.42 Issued at ` 975.55
lakhs, discount rate
10.28% per annum
June 4, 2008
SBI Life Insurance Co. Ltd. (500 commercial paper of
face value ` 500,000 each dated March 7, 2008
aggregating to ` 2,500 lakhs)
2,456.04 Issued at ` 2,438.87
lakhs, discount rate
10.28% per annum
June 4, 2008
Tata MF - Tata Fixed Horizon Fund (800 commercial
paper of face value ` 500,000 each dated March 7, 2008
aggregating to ` 4,000 lakhs)
3,928.19 Issued at ` 3,900.14
lakhs, discount rate
10.50% per annum
June 4, 2008
ABN Amro Flexible Short Term Plan - Series B (500
commercial paper of face value ` 500,000 each dated
March 7, 2008 aggregating to ` 2,500 lakhs)
2,455.16 Issued at ` 2,437.59
lakhs, discount rate
10.50% per annum
June 4, 2008
Total 38,688.70
* Religare Mutual Fund is formerly known as Lotus India Mutual Fund
Notes:
Note 1: Secured by first pari passu charge on all fixed assets of the company.
Note 2: Cash credit is secured by deferred payment note, hypothecation of book-debts, moveable fixed assets and
stocks of chemicals.
Note 3: Secured against the motor cars acquired on Equitable Monthly Instalment (EMI) System.
Note 4: Secured by pari passu first charge on the inventories and book debts of the Company.
Note 5: Secured by pari passu Second charge of all the movable fixed assets and pari passu First charge on current
assets of the Company.
F-220
Note 6: Secured by pari passu first charge on current assets of the Company including inventories, book debts and
loans and advances.
Note 7: Secured by pari passu second charge on current assets and the moveable fixed assets of the Company.
Note 8: As per the terms of the issue document, the bonds were redeemable, in whole but not in part at the option of
the Company at any time on or after January 25, 2009 and on or prior to January 26, 2011 subject to certain
conditions at 121.679 per cent of the principal amount. During the current year the balance outstanding bonds were
redeemed.
Note 9: These loans have been guaranteed by Reliance Capital Limited.
Note 10: Secured by first pari passu charge on the all assets of the Company and its wholly owned Indian
subsidiaries, along with corporate guarantee by Reliance Capital Limited.
Note 11: Secured by second charge on current assets and fixed assets (including moveable and immovable) of the
Company.
Note 12: Secured by first pari passu charge on the current assets and moveable fixed assets of the Company.
F-221
Annexure XVI
Reliance MediaWorks Limited
Statement of capitalisation as at September 30, 2012
Pre-issue Post-issue
As at
Particulars
September 30,
2012 As Adjusted for Issue*
Borrowings:
Short term borrowings 106,424.50
Long term borrowings (including ` 23,383.40 current
maturities) 94,795.90
Total borrowings 201,220.40
Shareholder's Fund:
Share capital (including Preference Shares) 2,453.81
Reserves and surplus (net) (excluding revaluation reserves) (22,905.34)
Less: Miscellaneous expenditures not written /off -
Total shareholder's fund (20,451.53) -
Long term debt / Shareholder‟s fund NA
Notes : -
a) Short term borrowing represents amount repayable within one year from September 30, 2012
b) The figures disclosed above are based on the summary statement of assets and liabilities, as restated, of the
Company as at September 30, 2012
c) The corresponding post issue figures are not determinable at this stage pending the completion of the Rights issue
process and hence have not been furnished.
F-222
Annexure XVII
Reliance MediaWorks Limited
Statement of the dividend paid / proposed
(` in lakhs)
Class of shares
Face value
of share in
`
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Equity shares
Equity share capital as at
period end 5
2,306.31
2,306.31
2,306.31 2,306.31 2,306.31
Total 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
Final dividend
Rate of the final dividend
(excluding dividend
distribution tax) - - - - 50.00%
Aggregating amount of
final dividend - - - - 1,153.15
F-223
Annexure XVIII
Reliance MediaWorks Limited
Statement of related party disclosures, as restated
Parties where control exists
Holding company
Reliance Capital Limited (up to November 30, 2007)
Reliance Land Private Limited (up to November 30, 2007)
Subsidiary companies
Reliance MediaWorks (UK) Limited (from May 19, 2006)
Reliance MediaWorks (USA) Inc. (from May 17, 2006)
Reliance MediaWorks (Netherlands) B.V. (from February 8, 2008)
Reliance MediaWorks (Mauritius) Limited (from March 20, 2008)
Adlabs Multiplexes and Theatres Limited (merged with the Company with effect from April 1, 2008)
Reliance MediaWorks Theatres Limited
Big Synergy Media Limited (from January 12, 2007)
Adlabs Multiplex Limited (from December 20, 2007 and merged with the Company with effect from April
1, 2008)
Rave Entertainment Private Limited (from May 31, 2007 and merged with the Company with effect from
April 1, 2008)
Reliance Broadcast Network Limited (ceased to be a subsidiary with effect from April 1, 2008 pursuant to
demerger of Radio business)
Sri Ramakrishna Theatre Limited (from January 11, 2008 upto May 27, 2011)
Rave Entertainment and Food Nepal Private Limited (from August 24, 2008 upto April 30, 2012)
Reliance MediaWorks Entertainment Services Limited (from May 4, 2009)
Katch 22 Entertainment Private Limited (from April 23, 2007 and merged with the Company with effect
from April 1, 2006 during Period 2008)
Reliance Media Consultant Private Limited (from February 16, 2012)
Reliance MediaVentures Private Limited (from June 19, 2012)
Step down subsidiary companies
Big Cinemas Entertainment LLC (from December 19, 2007)
Big Cinemas Entertainment (DE) LLC (from January 24, 2008)
Big Cinemas Laurel LLC (from November 28, 2007)
Big Cinemas Falls Church LLC (from November 8, 2007)
Big Cinemas Norwalk LLC (from March 14, 2008)
Big Cinemas Galaxy LLC (from December 21, 2007)
Big Cinemas Sahil LLC (from November 13, 2007)
Big Cinemas SAR LLC (from November 8, 2007)
Phoenix Big Cinemas Management LLC (from February 25, 2008)
Big Cinemas Phoenix LLC (from February 22, 2008)
Big Cinemas Exhibitions LLC (from March 6, 2008)
F-224
Big Cinemas IMC LLC (from January 19, 2008)
Reliance Lowry Digital Imaging Services Inc. (from September 1, 2008)
Reliance Media Works VFX Inc. (from January 25, 2010)
Big Pictures USA Inc. (from March 30, 2009)
Reliance Media and Marketing Communications LLC (from May 13, 2009)
Adlabs Digital Media LLC (from March 27, 2009 till April 15, 2010, the date of dissolution)
Adlabs Forum LLC (from March 6, 2008 till February 8, 2010, the date of dissolution)
Adlabs Heritage LLC (from March 7, 200 till May 14, 2010, the date of dissolution)
Adlabs GlobalStar LLC (from September 23, 2009 till February 9, 2010, the date of dissolution)
Big Cinemas Union LLC (from February 8, 2008 till February 19, 2010, the date of dissolution)
Reliance MediaWorks (Malaysia) Sdn. Bhd. (from April 18, 2008 till September 21, 2012)
Reliance MediaWorks Big Cinemas Sdn. Bhd. (from November 1, 2008 till September 21, 2012)
Other related parties with whom transactions have taken place during the period
(a) Significant shareholders, Key managerial personnel and their relatives
Manmohan Shetty (up to November 30, 2007)
Pooja Shetty (up to November 30, 2007)
Kirti Desai – Manager appointed u/s 269 of the Companies Act, 1956 (from January 30, 2008 till May 15,
2011)
Madhulika Singh – Manager appointed u/s 269 of the Companies Act, 1956 (from May 28, 2011 till June
30, 2011)
Ashish Agarwal – Manager appointed u/s 269 of the Companies Act, 1956 (from July 1, 2011)
Reliance Land Private Limited (up to November 30, 2007)
(b) Enterprises over which company has significant influence / associates
HPE / Adlabs LP.
Sultan Production Private Limited (upto March 31, 2009)
(c) Joint ventures
Cineplex Private Limited (upto June 3, 2011)
Swanston Multiplex Cinemas Private Limited
Divya Shakti Marketing Private Limited
Adlabs Multiplexes and Theatres Limited (upto December 19, 2007)
(d) Enterprises over which Key managerial personnel have significant influence
Dharma Production Private Limited (up to November 30, 2007)
Idream Productions Private Limited (up to November 30, 2007)
Whistling Woods International Private Limited (up to November 30, 2007)
Reliance Communication Infrastructure Limited (up to November 30, 2007)
Reliance Capital Asset Management Limited (up to November 30, 2007)
Reliance Web Stores Limited (up to November 30, 2007)
Reliance General Insurance Company Limited (up to November 30, 2007)
HPE / Adlabs LP. (up to November 30, 2007)
Nature of
transactions
Name of related party Holding Company
F-225
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Reliance Land Private
Limited - - - - 515.00
Dividend Paid Reliance Capital Limited - - - - 31.38
Nature of
transactions
Name of related party Subsidiary Companies
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Receiving of
Services
Reliance MediaWorks
Theatres Limited - - 0.60 0.60 -
Adlabs Multiplex Limited - - - - 10.90
Reliance MediaWorks
Entertainment Service
Limited 30.20 1,763.30 3.00 - -
Rave Entertainment
Private Limited - - - - 4.70
Reimbursement
of expenses
Reliance MediaWorks
(UK) Limited - - (0.90) (70.20) 242.00
Reliance MediaWorks
(USA) Inc. (88.80) (215.70) (0.80) (66.10) -
Reliance MediaWorks
Entertainment Services
Limited 4.70 0.30 38.90 - -
Sri Ramakrishna Theatre
Limited - 1.70 - - -
Reliance MediaWorks
(Mauritius) Limited 0.01 - - - -
Big Synergy Media
Limited - - 58.50 86.70 81.80
Rendering of
services
Reliance MediaWorks
Theatres Limited 10.00 6.60 6.00 6.00 -
Reliance MediaWorks
(UK) Limited - 0.50 3.80 425.80 36.40
Reliance MediaWorks
(USA) Inc. - - 4.00 740.30 89.20
Adlabs Multiplex Limited - - - - 3.80
Reliance MediaWorks
Entertainment Services
Limited 85.50 6.30 0.60 - -
Reliance MediaWorks
(Netherlands) B.V - - 1.80 - -
Big Synergy Media
Limited 298.00 304.10 312.10 76.00 70.50
Interest Income
Reliance Broadcast
Network Limited - - - - 130.30
Interest
expenses
Reliance MediaWorks
Theatres Limited 52.30 18.40 14.40 9.00 -
Dividend
income
Big Synergy Media
Limited - - 85.30 - -
F-226
Nature of
transactions
Name of related party Subsidiary Companies
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Investment /
Purchase of
shares
Reliance MediaWorks
(Mauritius) Limited - - - - 0.10
Reliance MediaWorks
(Netherlands) B. V. - - - - 10.40
Rave Entertainment
Private Limited - - - - 515.30
Reliance Broadcast
Network Limited - - - - 1,005.00
Adlabs Multiplex Limited - - - - 1,704.50
Reliance MediaWorks
Entertainment Services
Limited - - 4.00 - -
Reliance Media
Consultant Private
Limited 1.00 - - - -
Reliance MediaVentures
Private Limited 1.00 - - - -
Conversion of
loan to equity
shares
Reliance MediaWorks
Entertainment Services
Limited - 2,000.00 - - -
Subscription of
preference
shares
Reliance MediaWorks
Entertainment Services
Limited 12,000.00 - - - -
Loan given
Reliance MediaWorks
(Mauritius) Limited - 326.40 1,094.30 11,527.50 -
Reliance MediaWorks
(UK) Limited 4,806.60 898.40 2,375.90 318.40 -
Reliance MediaWorks
(USA) Inc. 2,918.80 7.090.00 11,564.60 9,381.70 865.80
Reliance MediaWorks
(Netherlands) B. V. - 44.90 67.00 - 444.20
Adlabs Multiplexes and
Theatres Limited - - - - 436.50
Rave Entertainment
Private Limited - - - - 3,246.40
Reliance Broadcast
Network Limited - - - - 6,098.10
Adlabs Multiplex Limited - - - - 24.80
Reliance MediaWorks
Entertainment Services
Limited 6,901.30 6,814.30 6,277.50 - -
Rave Entertainment and
Food Nepal Private
Limited - 432.00 - - -
Big Synergy Media
Limited - - - - 155.00
Loan received
back
Reliance MediaWorks
Theatres Limited - - - - 310.90
F-227
Nature of
transactions
Name of related party Subsidiary Companies
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Reliance MediaWorks
Entertainment Services
Limited $$ 12,000.00 - - - -
Reliance MediaWorks
(Mauritius) Limited 149.80 - - - -
Reliance MediaWorks
(USA) Inc. - - - 5,757.60 -
Reliance MediaWorks
(Netherlands) B. V. - - - 406.70 -
Reliance Broadcast
Network Limited - - - - 3,850.00
Adlabs Multiplex Limited - - - - 42.20
Big Synergy Media
Limited - - - - 155.00
Rave Entertainment and
Food Nepal Private
Limited 432.00 - - - -
Loans taken
Reliance MediaWorks
Theatres Limited 505.00 -
300.00 245.00
-
Loans repaid
Reliance MediaWorks
Theatres Limited
200.00 100.00 200.00
- -
Fixed assets
purchased
Reliance MediaWorks
Entertainment Services
Limited
3.80 103.20
- - -
Fixed assets
sold
Reliance MediaWorks
Entertainment Services
Limited - 9.70 - - -
Guarantees
given
Reliance MediaWorks
(USA) Inc.
1,056.00 2,832.10 810.50 11,258.40
-
Reliance MediaWorks
(Netherlands) B.V.
- - -
33.70
-
Reliance MediaWorks
Entertainment Services
Limited 2,640.00 -
7,500.00
- -
Rave Entertainment and
Food Nepal Private
Limited
- -
283.00
- -
Guarantees Rave Entertainment and - 100.00 - - -
F-228
Nature of
transactions
Name of related party Subsidiary Companies
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
cancelled Food Nepal Private
Limited
Reliance MediaWorks
(USA) Inc. - 9,906.60 - - -
Guarantees
outstanding
Reliance MediaWorks
(USA) Inc. 9,260.20 7,054.00 14,094.50 11,258.4 -
Reliance MediaWorks
(Netherlands) B.V.
34.00 32.00 30.30 33.70 -
Reliance MediaWorks
Entertainment Services
Limited 10,140.00 7,500.00 7,500.00 - -
Rave Entertainment and
Food Nepal Private
Limited
- 185.90 283.00 - -
Net outstanding
balances as at
period end
Reliance MediaWorks
(Mauritius) Limited @ 13,939.90 12,135.50 11,708.20 12,008.90 -
Reliance MediaWorks
Theatres Limited (555.40) (238.60) (333.10) (235.10) 47.90
Reliance MediaWorks
(UK) Limited 9,300.60 3,745.30 2,427.60 406.10 238.10
Reliance MediaWorks
(USA) Inc. 29,431.80 22,814.70 15,451.60 5,572.30 865.80
Reliance MediaWorks
(Netherlands) B. V. 159.00 149.90 96.50 39.90 444.20
Adlabs Multiplexes and
Theatres Limited - - - 436.50
Rave Entertainment
Private Limited - - - 3,246.40
Reliance Broadcast
Network Limited - - - 2,349.00
Adlabs Multiplex Limited - - - 72.80
Big Synergy Media
Limited (74.20) (303.50) (477.20) 288.60 207.30
Reliance MediaWorks
Entertainment Services
Limited 5,543.50 10,236.90 6,420.60 - -
Sri Ramakrishna Theatre
Limited - 1.70 - - -
Rave Entertainment and
Food Nepal Private
Limited - 432.00 - - -
@ - Amount provided for loans given to subsidiary - ` 6,921.90 lakhs
$$ - Amounts have been apportioned from loans towards subscription of preference shares of the
Subsidiary
F-229
Nature
of transactions
Name of related party Significant shareholders, key management personnel and their
relatives
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Dividend paid Manmohan Shetty - - - - 57.30
Managerial
remuneration
Ashish Agarwal 29.40
Madhulika Singh 0.80
Kirti Desai 5.60 10.80 7.80 7.80 1.40
Manmohan Shetty - - - - 116.10
Pooja Shetty - - - - 4.90
Loans given Kirti Desai - - 5.00 - -
Loans repaid Kirti Desai - - 5.00 - -
Nature of
transactions
Name of related party Enterprises over which Company has significant influence /
associates
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Reimbursement
of expenses
Sultan Production
Private Limited - - - (107.70) -
Interest Income HPE / Adlabs LP - - - - 43.70
Repayment of
principal by
Limited Liability
Partnership HPE / Adlabs LP - - 241.70 - -
Loan given
Sultan Production
Private Limited - - - 548.30 719.20
Outstanding
Balances as at
year / period end
Sultan Production
Private Limited - - - 1,159.70 719.20
Nature of
transactions
Name of related party Joint ventures
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Receiving of
Services
Cineplex Private Limited - - 9.70 17.60 17.00
Divya Shakti Marketing
Private Limited - - 8.40 14.60 18.00
Swanston Multiplex
Cinemas Private Limited - - 1.40 - -
Adlabs Multiplex
Limited - - - - 23.50
Reimbursement
of expenses
Cineplex Private Limited - 2.90 0.50 1.50 -
Swanston Multiplex
Cinemas Private Limited 7.00 - - - -
Divya Shakti Marketing
Private Limited - - 0.50 1.30 -
F-230
Nature of
transactions
Name of related party Joint ventures
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Rendering of
services
Cineplex Private Limited 2.80 16.50 16.50 16.90 12.60
Adlabs Multiplex
Limited - - - - 6.50
Interest income
Divya Shakti Marketing
Private Limited 20.20 13.50 17.10 29.03 -
Cineplex Private Limited - 16.50 50.70 13.34 -
Dividend Paid
Swanston Multiplex
Cinemas Private Limited - - - (75.00) (55.00)
Investment /
Purchase of
shares
Swanston Multiplex
Cinemas Private Limited 125.00 - - - -
Loan given
Advance
towards share
application
money
Swanston Multiplex
Private Limited - - 125.00 -
-
Loan Received
back Cineplex Private Limited 133.40 101.50 104.30 128.10 30.00
Outstanding
balances as at
year end Cineplex Private Limited
- 133.40
256.90 342.20 489.20
Divya Shakti Marketing
Private Limited
241.70 201.30
194.50 223.60 222.40
Swanston Multiplex
Cinemas Private Limited 0.80 125.80 125.80 - -
* - Amount written off – Period 2012 ` 20.20 lakhs, Period 2011 ` 13.50 lakhs, Period 2010: ` 30.40 lakhs
Note:
1. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of
20%. This investment was made by the Company with the intention of investment in the movie
"Sultan: The warrior". However, during Period 2010, the Company had issued a letter of termination
demanding refund for the moneys paid by the Company and filed a recovery suit against Orcher
Studios, as per a shareholders‟ agreement signed by the Company which has been agreed to by Orcher
Studios. Since, the Company has intention of selling the shares; the Company has decided not to
consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23 'Accounting for
Associates in Consolidated Financial Statements. The outstanding balance of Sultan Production Private
Limited was ` 1,158.80 lakhs as at March 31, 2010, of which the Company had considered ` 120.00
lakhs as doubtful in the previous year and provided for the same.
During Period 2011, the Company has received all the money receivable as per the shareholders
agreement and sold the shares.
2. The Company has issued 11% 3,500 Secured Redeemable Non Convertible Debentures (Debentures)
amounting ` 35,000 lakhs as of September 30, 2012 having face value of ` 10 lakhs each on a private
placement basis. The Debentures are secured by first pari passu charge on all assets of the company
and its Indian subsidiaries.
F-231
3. Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Company has decided to provide for diminution in the value of
investments amounting to ` 825.10 lakhs.
F-232
Annexure XIX
Reliance MediaWorks Limited
Statement of tax shelter
(` in lakhs)
Sr.
No. Particulars Period 2012
Period
2011
Period
2010
Period
2009
Period
2008
1 (Loss) / profit before tax, as
restated (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Adjustments for:
Modified Scheme of
Amalgamation and Arrangement - - - - (6,705.80)
Amalgamation of Katch 22 - - - - (2,000.00)
2 Adjusted (Loss) / profit before
tax, as restated (70,356.34) (24,348.00) (8,797.00) (4,920.31) (6,156.54)
3a Income tax rates including
surcharge and education cess 32.45% 33.22% 33.99% 33.99% 33.99%
3b Minimum alternate tax rate 20.01% 19.93% 17.00% 11.33% 11.33%
4 Tax at income tax rates (1X3a) - - - - -
5 Adjustments:
A Permanent differences
i Exempt income net of expenses (1,611.92) (1,752.58) (2,318.83) 10.29 (3,737.17)
ii Expenditure disallowed under
Income Tax Act, 1961 4,426.92 (3,076.56) 4.05 23.68 20.77
iii Adjustments for:
Composite Scheme of
Amalgamation
and Arrangement
- - - - Iv Scheme of Amalgamation
- - (7,756.55) -
5a Total permanent differences 2,815.00 (4,829.14) (2,314.78) (7,722.58) (3,716.40)
B Timing differences
i Difference between book and tax
depreciation 737.62 (612.45) (2,061.06) (2,115.06) (5,038.38)
ii Unrealised notional (gain) / loss
on foreign exchange - - (2,037.19) 416.22 1,680.78
iii Arising out of differences in
treatment of expenses as per
Income Tax Act, 1961 and as per
books of account:
iv (Loss) / profit on sale of fixed
assets 674.20 (2,701.14) 40.79 4.40 56.50
F-233
Annexure XIX
Reliance MediaWorks Limited
Statement of tax shelter
(` in lakhs)
Sr.
No. Particulars Period 2012
Period
2011
Period
2010
Period
2009
Period
2008
v Notional rent as per Accounting
Standard 19 on "leases" 4,119.80 1,229.51 506.99 250.59 301.11
vi Provision of bad debts / advance 9,802.30 1,658.21 121.88 - -
vii Others 194.63 366.80 (174.17) 222.84 63.39
5b Total timing differences 15,528.55 (59.07) (3,602.76) (1,221.01) (2,936.60)
c Other differences
i Profit on sale of Investments (806.09) (423.57) (274.41) (269.17) (9.10)
ii Dividend stripping u/s.94
- - - 11.58
5c Total other differences (806.09) (423.57) (274.41) (269.17) 2.48
6 Total adjustments (5a+5b+5c) 17,537.46 (5,311.78) (6,191.95) (9,212.76) (6,650.52)
7 Tax savings thereon (6X3a) 5,690.91 (1,764.57) (2,104.64) (3,131.42) (2,260.51)
8 Taxable (loss) / profit as per
Income Tax Act (2+6)
(52,188.88) (29,659.78) (14,988.95) (14,133.07) (12,807.06)
9 Income tax thereon (8X3a)
- - - -
10 Short term capital gains tax
- - - -
11 Total income tax
- - - -
12 Taxable income as per section
115JB of the Income Tax Act,
1961 (60,554.04) (23,961.52) (8,882.27) (5,125.70) (8,965.66)
13 MAT thereon (12X3b) - - - - -
14
Total tax as per income tax return
(higher
-
- - - -
of 9 and 13)
14 Deferred tax charge / (credit) - - - (134.80) 621.40
15 Fringe benefit tax - - - 151.50 71.49
16 Total tax as per summary
statement of profit and loss, as
restated - - - 16.70 692.89
F-234
Annexure XIX
Reliance MediaWorks Limited
Statement of tax shelter
(` in lakhs)
Sr.
No. Particulars Period 2012
Period
2011
Period
2010
Period
2009
Period
2008
Notes
1 The statement of tax shelter has been prepared based on adjusted profit/loss as per the summary statement of
profit and losses, as restated (Refer Annexure II.)
2 The above statement should be read together with Summary of significant accounting policies and notes to
summary statement, as restated (Annexure IV).
3
The figures for the eighteen month period ended September 30, 2012 are based on the tax return for the year
ended March 31, 2012 and the provisional computation of total income prepared by the Company for the
year ended March 31, 2013 and are subject to any changes that may be considered at the time of final filing
of the return of income for the year ended March 31, 2013.
4
Where the adjusted restated results before taxes are a loss, tax expense at applicable rate is taken as
Nil.
F-235
PRO FORMA FINANCIAL STATEMENT
Summary statement of assets and liabilities of the Company on a pro forma basis as at September 30, 2012
(` in lakhs)
Particulars As at Adjustments As at
September
30, 2012
(Restated)
Transfer of
Film
Production
Services
business
Transfer of
Theatrical
Exhibition
business
September 30,
2012
(Restated)after
adjustments
Assets
A Non-current assets
I Fixed assets
(i) Tangible assets 75,331.83 31,106.27 43,715.47 510.09
(ii) Intangible assets 722.20 177.37 175.53 369.30
(iii) Capital work-in-progress 11,966.60 5,433.42 6,533.18 -
II Non-current investments 18,040.94 - 359.32 17,681.62
III Deferred tax assets (net) -
-
IV Long-term loans and advances 22,599.00 994.00 13,849.07 7,755.93
V Other non-current assets 62.00 - - 62.00
128,722.57 37,711.06 64,632.57 26,378.94
B Current assets
I Inventories 658.50 101.26 557.03 0.21
II Trade receivables 16,179.40 4,342.35 2,288.24 9,548.81
III Cash and bank balances 6,802.00 - - 6,802.00
IV Short-term loans and advances 55,409.10 1,336.14 1,094.73 146,008.65
V Other current assets 717.60 - - 717.60
79,766.60 5,779.75 3,940.00 163,077.27
Liabilities
C Non-current liabilities
I Long-term borrowings 71,412.50 - - 71,412.50
II Deferred tax liabilities (net) - - - -
III Other long-term liabilities 3,636.70 200.60 3,436.10 -
IV Long-term provisions 501.10 - - 501.10
75,550.30 200.60 3,436.10 71,913.60
D Current liabilities
I Short-term borrowings 106,424.50
106,424.50
II Trade payables 12,646.50 1,325.17 8,576.89 2,744.44
III Other current liabilities 34,225.40 1,606.49 3,887.71 28,731.20
IV Short-term provisions 94.00
94.00
F-236
Summary statement of assets and liabilities of the Company on a pro forma basis as at September 30, 2012
(` in lakhs)
Particulars As at Adjustments As at
September
30, 2012
(Restated)
Transfer of
Film
Production
Services
business
Transfer of
Theatrical
Exhibition
business
September 30,
2012
(Restated)after
adjustments
153,390.40 2,931.66 12,464.60 137,994.14
E Net Worth (A+B-C-D) (20,451.53)
(20,451.53)
F Represented by
i) Share capital 2,453.81
2,453.81
ii) Reserves and surplus (net) (22,905.34)
(22,905.34)
G Net Worth (i+ ii) (20,451.53) - - (20,451.53)
The above statement should be read together with notes to pro forma financial statements.
F-237
Summary statement of profit and loss of the Company on a pro forma basis for the eighteen month period ended
September 30, 2012
(` in lakhs)
Particulars
Period
2012
(Restated)
Adjustments
Period
2012
(Restated)
after
adjustments
Transfer of
Film
Production
Services
business
Transfer of
Theatrical
Exhibition
business
Revenue from operations 76,129.30 16,652.57 59,136.09 340.64
Other income 4,325.50 144.40 815.50 3,365.61
Total revenue 80,454.80 16,796.97 59,951.59 3,706.25
Direct operational expenses 30,064.14 3,339.65 26,846.43 -121.94
Employee benefits expense 13,856.10 6,001.80 5,326.92 2,527.37
Finance costs (including loss on derivative contracts)
(net) 39,061.20 5.22 44.54 39,011.44
Depreciation and impairment expense 10,789.40 3,804.34 6,755.02 230.05
Other expenses 49,813.10 3,650.68 40,199.55 5,962.87
Total expenses 143,583.94 16,801.69 79,172.46 47,609.79
(Loss) before tax and exceptional items (63,129.14) (4.72) (19,220.87) (43,903.54)
Exceptional items (7,227.20) (305.29) - (6,921.91)
(Loss) / profit before tax (70,356.34) (310.01) (19,220.87) (50,825.45)
Less - Provision for taxes
Net (loss) after tax (70,356.34) (310.01) (19,220.87) (50,825.45)
Period 2012 - Eighteen months ended September 30, 2012 The above statement should be read together with notes to pro forma financial statements.
F-238
Notes to pro forma financial statements
Background
Reliance MediaWorks Limited („Reliance MediaWorks‟ or „the Company‟) was incorporated in 1987 as a Private
Limited Company and is currently a Public Listed Company. The equity shares of the Company are listed on BSE
Limited and National Stock Exchange of India Limited. Reliance MediaWorks is primarily engaged in theatrical
exhibition, film production services and television / film production and distribution and related services.
The Company‟s last financial year ended on September 30, 2012 and was for a period of 18 months ended on that
date. The pro forma balance sheet is prepared as of September 30, 2012 and the pro forma statement of profit and
loss is for a period of 18 months ended on September 30, 2012.
Basis of presentation
The shareholders of the Company have approved on February 21, 2012 through postal ballot the resolution to sell or
otherwise dispose of the Company‟s whole or part of undertakings pertaining to the Film & Media Services and
Exhibition business on a going concern basis to its wholly owned subsidiaries at consideration not less than tax
written down values as the board may decide and on such terms and conditions and in such manner as may be
decided by the board and the wholly owned subsidiaries.
The pro forma financial information of the Company assume the transfer of the film production services and
theatrical exhibition business segments of the Company to the subsidiaries of the Company at book values. For the
purpose of the transfer, it is assumed that all assets which form part of segment assets and segment liabilities are
transferred to the subsidiaries of the Company and the amount receivable as consideration on transfer is shown as a
short term loan and advance recoverable from these subsidiaries.
For the purpose of preparation of pro forma balance sheet as at September 30, 2012, it is assumed the assets have
been trasnferred on September 30, 2012.
For the purpose of prepration of pro forma statement of profit and loss, it is assumed that assets have been
transferred at the beginning of the eighteen month period ended September 30, 2012.
This pro forma financial information is prepared solely for information purpose and is not necessarily indicative of
the net results of operations that might have been achieved for period or dates indicated nor is it necessarily
indicative of the future results of the Company after subsidiarization.
254
FINANCIAL INDEBTEDNESS
The details of indebtedness of our Company on a standalone basis, as at January 31, 2013, are as provided below, together with a brief description of certain material
covenants of the relevant financing agreements:
Secured Loans
I. Loans
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal
amount
outstanding as
at January 31,
2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
1. Allahabad Bank,
Export-Import Bank
of India, Jammu & Kashmir Bank,
Syndicate Bank,
Union Bank of India and Vijaya
Bank
Multi facility
agreement
dated March 28, 2008 as
amended and
restated by syndication
and
amendment agreement
dated June 27,
2008 (“Multi
Facility
Agreement”)
Aggregate:
40,000.00
Aggregate:
13,333.36
(i) repayment of our
Company‟s outstanding
commercial papers facilities; and
(ii) funding capital
expenditure in the exhibition and
processing business and
the repayment of our Company‟s outstanding
commercial papers
(i) part repayment of our
Company‟s outstanding
commercial papers facilities; and (ii)
funding capital
expenditure in the exhibition division
For first 12
months
commencing from the date of
disbursement:
10.75% p.a.
For the term
thereafter (depending upon
the benchmark
rate selected by each of the
lender):
percentage rate p.a. equal to (i)
SBI PLR – SBI
PLR margin as defined in the
Multi Facility
Agreement; or (ii) GOI Sec +
GOI Sec margin
as defined in the Multi Facility
Agreement
Five years from
the date of
disbursement i.e. commencing
from March 31,
2008
Three equal
annual
installments commencing
from date
falling 36 months after
the date of
disbursement i.e. March 31,
2011
For details
of security
see note 1 below
Allahabad Bank:
5,000.00
1,666.67
255
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal
amount
outstanding as
at January 31,
2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
Export-Import Bank
of India: 7,000.00
2,333.34
Jammu &
Kashmir
Bank: 7,000.00
2,333.34
Syndicate
Bank: 7,000.00
2,333.34
Union Bank
of India:
6,000.00
2,000.00
Vijaya Bank:
8,000.00
2,666.67
2. Syndicate Bank General
Agreement
dated June 11,
2010 and the
sanction letter dated May 31,
2010 as
supplemented by letter dated
July 18, 2011
15,000.00 9,375.00 For augmenting long
term working capital
requirement
For augmenting long
term working capital
requirement
Base Rate +
2.50% p.a.
Five years 16 equal
quarterly
installments
after one year
initial moratorium
from the date
of drawdown
For details
of security
see note 1
below
256
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal
amount
outstanding as
at January 31,
2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
3. Union Bank of India
Term loan agreement
dated January 29, 2010 and
review letter
dated January 18, 2010 as
modified by
the sanction letter dated
February 9,
2010. This was further
modified by
the sanction letter dated
July 27, 2011.
Our Company
accepted this
revision
effective from June 6, 2012
vide agreement
dated June 7, 2012
8,000.00 4,400.00 For financing our Company‟s studios
situated at Film City, Mumbai
For financing our Company‟s studios
situated at Film City, Mumbai
Base Rate + 3.50% p.a.
Six years 11 months
20 equal quarterly
installment of
`400 lakhs
commencing
from March 31, 2012
For details of security
see note 1 below
4. Bank of Baroda Sanction letter
January 5, 2010 as
amended by
letter dated June 20, 2010
and November
1, 2010 and reviewed on
Aggregate:
6,100.00
Aggregate:
1,157.73
Working capital Working capital
For details
of security see note 2
below
Fund based:
600.00
Fund based:
1.32
Cash credit:
2.75% above
Base Rate
(floating) p.a.
Cash credit: 12
months
Cash credit:
On demand
257
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal
amount
outstanding as
at January 31,
2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
June 25, 2012 and Deed of
Declaration and
confirmation
dated September 24,
2012
Non fund based:
5,500.00
Non fund based:
(i) letter of credit:
1,124.50 lakhs
(USD 20 lakhs); (ii)
bank
guarantee: 31.91
(i) Bank guarantee:
commission of 50% of
applicable
charges; and (ii) Inland/import
letter of
credit/letter of undertaking/
letter of credit to
avail buyer‟s credit: (a) 40% of
applicable
charges for import/inland
letter of credits
upto `100 lakhs;
(b) charges as
applicable for
import/inland letter of credits of
above `100 lakhs; and (c)
letter of
undertaking / letter of credit in
foreign currency
as per schedule of charges
(i) Bank guarantee: five
years. Above five years, the same
shall will be dealt
on case to case basis; and (ii)
Inland/import
letter of credit/ letter of
undertaking /
letter of credit to avail buyer‟s
credit: (a) 365
days for raw material; and (b)
upto three years
for capital goods
Bank guarantee on expiry and
Inland/import letter of credit/
letter of
undertaking / letter of credit
to avail buyer‟s
credit: on maturity
5. Axis Bank Limited Letter of
arrangement: overdraft credit
advances dated
January 29, 2010 and
sanction letter
December 8, 2009 as
Aggregate:
7,000.00 Aggregate:
3,067.78
For details
of security see note 3
below Fund based:
2,000.00
Fund based:
(1.68)
Over draft: to meet
temporary mismatch of
funds
Over draft: To meet
temporary mismatch of
funds
Over draft: Base
Rate + 4.00% p.a.
One year Over draft: On
demand
258
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal
amount
outstanding as
at January 31,
2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
amended by the letter dated
August 13, 2010 and the
letter dated
July 21, 2011 and first
supplemental
indenture of mortgage dated
February 6,
2013
Non fund based:
5,000.00
Non fund based: (i) letter
of credit:Nil; (ii) letter of
credit for
purchase/import of capital
goods: Nil; (iii)
buyers credit: 2,914.41; (iv)
bank
guarantee: 153.37; and (v)
standby letter
of credit: Nil
(i) letter of credit: (a) for procurement of raw
materials, consumables stores, spares and tools,
packing materials etc.
(b) any other purpose approved by the bank;
(ii) letter of credit for
purchase / import of capital goods: (a) for
procurement of capital
goods; and (b) any other purpose approved by the
bank; (iii) buyers credit
and standby letter of credit: (a) for
procurement of raw
materials, consumables
stores, spares and tools,
packing materials etc.
(b) any other purpose approved by the bank,
(c) for procurement of
capital goods; (iv) bank guarantee: towards bids,
bond, security deposit,
contract performance/performanc
e guarantee, advance
payment and retention money purpose etc.
(i) buyers credit: (a) for procurement of raw
materials, consumables stores, spares and tools,
packing materials etc.
(b) any other purpose approved by the bank,
(c) for procurement of
capital goods; (ii) bank guarantee: towards bids,
bond, security deposit,
contract performance / performance guarantee,
advance payment and
retention money purpose etc.
Commission: (i) letter of credit
and letter of credit for
purchase/import
of capital goods: 0.60% p.a. +
services tax; (ii)
buyers credit: 0.75% p.a. +
applicable tax;
(iii) bank guarantee and
standby letter of
credit: 0.75% p.a. + applicable
service tax
(i) letter of credit and letter of
credit for purchase / import
of capital goods:
(a) inland letter of credit:
maximum usance
upto 180 days; and (b) foreign
letter of credit:
maximum usance of 365 days; (ii)
buyers credit: (a)
import of raw material: upto
one year; and (b)
import of capital
equipment: upto
three years; (iv)
bank guarantee: maximum upto
5.5 years; and (v)
standby letter of credit: three years
On maturity
6. Syndicate Bank General
agreement dated June 10,
2011 and
sanction letter dated June 6,
2011
10,000.00 10,000.00 Long term working
capital
Long term working
capital
Base rate + 1%
p.a.
Three years Four equal
quarterly installments
from the date
of drawdown after a
moratorium
period of two years
For details
of security see note 1
below
259
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal
amount
outstanding as
at January 31,
2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
7. HDFC Bank Limited
Loan agreement cum
guarantee dated October
26, 2006
Non fund based:
10,000.00 (credit
facility)
Non fund based: 493.85
(Bank Guarantee)
Working capital requirement
Working capital requirement
Commission: at a mutually agreed
rate
On maturity On expiry For details of security
see note 4 below
8. 11% Secured Redeemable Non -
Convertible Debentures issued
to Yes Bank
Limited *
11% Secured Redeemable
Non - Convertible
Debentures
35,000.00 35,000.00 Refinancing of existing debt and capital
expenditure of the Company
Repayment of Existing Debts
11.00% p.a. Coupon Rate
Series 1 - ` 10,000 lakhs –
March 1, 2014
Series 2 - `
12,500 lakhs – March 1, 2015
Series 3 - `
12,500 lakhs – March 1, 2016
Series 1 - ` 10,000 lakhs –
March 1, 2014
Series 2 - `
12,500 lakhs – March 1, 2015
Series 3 - `
12,500 lakhs – March 1, 2016
For details of security
see note 5 below
9. Indiabulls Financial
Services Limited
Loan
Agreement, Deed of
Hypothecation
dated August 30,
2012,Sanction
Letter dated August 30,
2012
17,500.00 17,500.00 General Corporate
Purpose
Repayment of Existing
Debts, Working Capital requirement and cash
flow mismatch
12.79% - IBFSL
PLR – 921bps
18 months 6 monthly
equal installment of
` 2,916.67
lakhs after twelve months
of drawal
For details
of security see note 6
below
10. ICICI Bank Ltd.** Deed of
Hypothecation dated October
1,
2012,Sanction Letter dated
September 6,
2012 along with
modification
letter dated September 20,
2012
4,111.00 4,110.85 Performance Guarantee
towards bid contract performance/performanc
e guarantees, advance
payment and retention money purposes,
Customs, central excise,
sales tax, electricity, insurance
Utilized for issuance of
Bank Guarantees in favour of project Studio
& Entertainment Tax or
availing Etax benefit on Exhibition business
1.05% p.a. 6 months On demand For details
of security see note 7
* Reliance Capital Limited has provided a corporate guarantee dated March 5, 2012 in favour of Axis Trustee Services Limited for an amount of `35,000 lakhs for the said 11% Secured
non convertible Debentures.
260
** Reliance Capital Limited has provided a corporate guarantee dated September 7, 2012 in favour of ICICI Bank Limited for an amount of `3,767 lakhs for the said Bank Guarantee
Facility.
Note 1:
First pari-passu charge on the fixed assets of our Company.
Note 2:
Cash credit & Inland/import letter of credit / letter of undertaking / letter of credit
First pari-passu charge on the entire current asset & movable fixed assets of our Company.
Bank guarantee
(i) Counter indemnity signed by our Company; and
(i) First pari-passu charge on the current asset of our Company; and
(ii) First pari-passu charge on the movable fixed assets of our Company.
Note 3:
(i) First pari-passu charge on the current asset of our Company; and
(ii) First pari-passu charge on the movable fixed assets of our Company.
In addition to the above, for bank guarantee and standby letter of credit a counter indemnity of our Company to be furnished.
Note 4:
Lien over fixed deposit to the extent of 100% value of the loan.
Note 5:
Secured by pari passu first charge on Fixed Assets (including Immovable and Movable Fixed Assets) and Current Assets of the Company and wholly owned Indian
subsidiaries namely Reliance MediaWorks Entertainment Services Limited and Reliance MediaWorks Theatres Limited.
Note 6:
261
Secured by Second charge on all Fixed Assets and Current Assets, including receivables/ book debts to the extent of minimum of 125% of the loan amount.
Note 7:
Secured by pari passu first charge on all Current Assets, including receivables/ book debts.
Unsecured Loans
II. Loans
Sr.
no.
Name of
the lenders
Nature of
borrowing
Amount
sanctioned
(In ` lakhs)
Principal amount
outstanding as at
January 31, 2013
(In ` lakhs)
Interest/Commission
Tenure
Repayment
1. 12.50%
unsecured
redeemable
Non –
Convertible
Debentures
issued to
Barclays
Bank PLC
12.50% unsecured
redeemable Non –
Convertible
Debentures
4,400.00 3,300.00 12.50% p.a., compounded
monthly, payable quarterly
in arrears
Series C – March
10, 2013
Series D – June
10, 2013
Series E –
September 10,
2013
Series F –
December 10,
2013
Series G – March
10, 2014
Series H – June
10, 2014
Series C – March 10, 2013 - Rs.
550.00
Series D – June 10, 2013 - Rs.
550.00
Series E – September 10, 2013 -
Rs. 550.00
Series F – December 10, 2013 -
Rs. 550.00
Series G – March 10, 2014 - Rs.
550.00
Series H – June 10, 2014 - Rs.
550.00
III. Inter Corporate Deposits
Sr.
no.
Name of the
lenders
Nature of borrowing Amount
sanctioned
(In ` lakhs)
Principal amount
outstanding as at
January 31, 2013
(In ` lakhs)
Interest
Tenure
Repayment
1. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated March 7,
2012
25,187.50 21,136.43 13.00% p.a. One year from the date of
disbursement
On Demand
262
Sr.
no.
Name of the
lenders
Nature of borrowing Amount
sanctioned
(In ` lakhs)
Principal amount
outstanding as at
January 31, 2013
(In ` lakhs)
Interest
Tenure
Repayment
2. Magma Fin Corp
Ltd
Inter corporate deposit facility
agreement dated March 26,
2012 and renewal letter dated
September 8, 2012
2,200.00 2,200.00 12.00% p.a. 6 months from date of
drawl
On Demand
3. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated March 30,
2012
1,900.00 1,900.00 13.00% p.a. One year from the date of
disbursement
On Demand
4. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated April 3, 2012
18,850.00 18,850.00 13.00% p.a. One year from the date of
disbursement
On Demand
5. Magma Fin Corp
Ltd
Inter corporate deposit facility
agreement dated April 30,
2012 and renewal letter dated
October 9, 2012
1,300.00 1,300.00 12.00% p.a. 6 months from date of
drawl
On Demand
6. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated May 7, 2012
39,840.00 39,840.00 13.00% p.a. One year from the date of
disbursement
On Demand
7. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated June 7, 2012
3,863.50 3,863.50 13.00% p.a. One year from the date of
disbursement
On Demand
8. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated July 3, 2012
7,690.00 7,690.00 13.00% p.a. One year from the date of
disbursement
On Demand
9. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated September
10, 2012
4,565.50 4565.50 13.00% p.a. One year from the date of
disbursement
On Demand
10. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated October 25,
2012
3,238.00 3,238.00 13.00% p.a. One year from the date of
disbursement
On Demand
11. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated November
23, 2012
2,400.00 2,400.00 13.00% p.a. One year from the date of
disbursement
On Demand
263
Sr.
no.
Name of the
lenders
Nature of borrowing Amount
sanctioned
(In ` lakhs)
Principal amount
outstanding as at
January 31, 2013
(In ` lakhs)
Interest
Tenure
Repayment
12. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated December 6,
2012
3,500.00 3,500.00 13.00% p.a. One year from the date of
disbursement
On Demand
14. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated January 8,
2013
4,200.00 4,200.00 13.00% p.a. One year from the date of
disbursement
On Demand
Others
Further, as of January 31, 2013, our Company has availed an unsecured loan of `375 lakhs by way of promissory note dated March 19, 2010 from Reliance MediaWorks
Theatres Limited (formerly Adlabs Distributors & Exhibitors Limited). This loan is repayable on demand and the interest payable on the same is 7.00% - 10.50% per annum.
Restrictive covenants with respect to our borrowing
Certain corporate actions for which our Company requires the prior written consent of the lenders include:
1. Make any change in the management set-up;
2. Transfer the Equity Shares held by our Promoters below the prescribed per cent;
3. Issue any guarantee except as required under the transaction documents;
4. Enter into any transaction of merger, consolidation, amalgamation or re-organisation;
5. Convey, sell, lease, let or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets, except for any
permitted disposal;
6. Alter Memorandum of Association and / or Articles of Association;
7. Agree to, create, incur, assume or suffer to exist any security interest upon or with respect to any property, revenues, or assets (real, personal or mixed, tangible or
intangible) of our Company, whether now owned or hereafter acquired;
8. Change in our Company‟s capital structure which is adverse to the interest of the lenders;
9. To declare or pay dividends for any year except out of profits relating to that year after the meeting of all financial commitments to the bank and making of due and
necessary provisions;
264
10. To utilize the loans for purposes other than provided for;
11. Make any corporate investment or investment by way of contribution to share capital or debentures or advance funds to or place deposits with any concern; and
12. Any incremental indebtedness over and above outstanding as on February 15, 2012 – excluding promoter loans/group ICDs will be with the prior approval of
Majority Debenture holders at that point of time.
13. Future losses to be funded through Equity or Promoter‟s loan / Group ICD‟s
14. All future Promoter loans/Group ICDs will be subordinated & subservient in all terms and conditions to the Debentures.
Further, under the terms of the loan agreements, our Company is required to maintain certain limits on financial ratios like, inter alia, ratio of gross borrowings to tangible net
worth, ratio of gross borrowings to EBITDA, ratio of secured debt to secured fixed assets and ratio of EBITDA to schedule debt payment.
265
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
You should read the following discussion of our financial condition and results of operations in conjunction
with the audited and restated consolidated financial statements including the schedules and notes thereto and
the examination reports thereon, which appear at page F1.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may
differ materially from those anticipated in these forward-looking statements as a result of certain factors, such
as the risks set forth in the chapters entitled “Risk Factors” and “Forward Looking Statements” at pages 11
and 10, respectively.
The following discussion and analysis of our financial condition and results of operations is based upon and
should be read in conjunction with our audited consolidated financial statements, as restated, Fiscal 2012 and
Fiscal 2011, Fiscal 2010 and Fiscal 2009, including the schedules, annexures and notes thereto and the reports
thereon. Our audited consolidated and standalone financial statements, as restated, are prepared in accordance
with Indian GAAP, the accounting standards prescribed under the Accounting Standard Rules, 2006, the
relevant provisions of the Companies Act and the SEBI Regulations.
Overview
We are one of India‟s leading entertainment and media (“E&M”) companies with a presence across several
businesses such as theatrical exhibition of films, film and media services and television content production and
distribution. Our headquarters are located in Mumbai and we have operations across 79 cities and towns in India
and internationally, in, the UK and the United States.
Our theatrical exhibition business is our largest source of revenue. We operate one of India‟s largest cinema
chains, under the brand „BIG Cinemas‟, with 258 screens in India and an additional 194 screens in the United
States as of January 31, 2013. During the Fiscal 2012, BIG Cinemas catered to approximately 502 lakhs and 71
lakhs consumers in India and overseas, respectively.
Our film and media services business comprising production, post-production services and creative services for
films and television is our second largest source of revenue, which comprises:
Production services: We lease sound stages, shooting floors, standard and high definition multi-camera
equipment and other related equipment to television and film production companies.
Post-production services: We process film negatives at our laboratory located in Film City, Mumbai
and trade film negatives in India. Our 4K DI laboratory located in Film City, Mumbai undertakes
quality enhancement of film and television content through digital techniques.
Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to
3D and CGI services through our subsidiary, Reliance MediaWorks Entertainment Services Limited. In
addition, our subsidiaries located in United States and UK, Reliance Lowry Digital Imaging Services,
Inc and Reliance MediaWorks (UK) Limited, respectively, are engaged in the business of digital image
correction, film restoration and film processing.
We operate our film post production services through our production laboratory in Mumbai and our creative
services through facilities in Burbank (United States), London (U.K) and Navi Mumbai (India). Films processed
at our laboratory in Mumbai have won, among others, 14 national awards for cinematography and our
Company‟s film processing facilities have been certified by Kodak Imagecare, an internationally recognised
quality certification program, for each of the years beginning 2007. We were among four companies to receive
the “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in
2010. In August 2011, our Company received a patent for an innovation – “System and method for removing
semi-transparent artifacts from digital images caused by contaminants in the camera‟s optical path”. We won
the Scientific and Technical Award, 2012 at the Academy of Motion Picture, Arts and Sciences in 2012, for the
development of a unique and efficient system for the reduction of noise and other artefacts, thereby providing
high quality images required by the film making process.
266
As a part of our long term growth strategy of asset creation, during the previous five years, we have established:
a business process outsourcing (BPO) facility at Navi Mumbai;
post-production facilities for television commercials and broadcast; and
a DI Lab.
Further, we have purchased broadcast and film cameras. We have also increased the number of screens we
operate. This has been achieved organically and has enhanced our reach in terms of exhibition business and
also enabled us to strengthen our capabilities in post-production services and creative services divisions.
We are also in the process of establishing approximately 2,00,000 square feet studio located in Film City,
Mumbai with facilities for shooting films, television shows and television commercials, which we believe
meets international standards. This studio aims to provide a one-stop solution for all production needs for
domestic and international clients. When completed, the studio is expected to have three studio buildings
with eight sound stages with appropriate noise control and other features. A part of the studio constituting 1
studio building with three sound stages is in operation since January 2011. We expect to complete the
remaining portion of the studio by December 2013.
We are also engaged in the business of television content production under the brand “BIG Synergy”,
which primarily produces non-fiction programmes in addition to adapting international programme formats
for Indian viewers. We have produced shows such as Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se
Tez Hain, Dus Ka Dum, India‟s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna.
We also selectively distribute films.
For Fiscal 2012 and Fiscal 2011, our restated consolidated net loss after tax was ` 91,016.62 lakhs and `
32,816.99 lakhs, respectively. For Fiscal 2012 and Fiscal 2011, our consolidated total income was `
125,486.90 lakhs and ` 85,026.20 lakhs, respectively.
Factors Affecting Our Results of Operations
The key factors affecting our results of operations are set out below:
Our Ability to Predict and Control Key Revenue and Cost Drivers
The key components of our costs include:
Distributors‟ Share for Exhibition of Films: Our ability to retain a sufficient share of our box office
collections for the films we exhibit is one of the key drivers of our revenues. In India, in order to obtain the
right to exhibit a film in our single-screen cinema theatres, we pay the distributor of the film a certain fixed
percentage of the relevant film‟s gross or net box office collections, while for the exhibition of a film in our
multiplexes, we pay the distributor of the film a percentage of our revenue based on the overall performance
of the film at multiplexes in India. In overseas, we enter into agreements with distributors in which a
distributor‟s share could typically ranges between 40% to 70% of the box office collections, depending on
the location of the cinema theatre and the film. In the future, if distributors are able to demand a higher
share of films‟ revenues, we will be able to retain a smaller share of our box office collections, which would
adversely affect our operations.
Film Studio Establishment and Operation: We are also in the process of establishing an approximately
200,000 square feet studio located in Film City, Mumbai with facilities for shooting films, television shows
and television commercials, which we believe is on par with international standards. We believe that our
future performance will be significantly dependent on our ability to complete the project in a timely manner
and within expected costs. A part of this studio was completed in January 2011. We expect to incur
significant additional costs to complete the remaining parts of the studio and to operate the studio to provide
film and television production services. Certain factors that may affect the cost of establishing the studio
include our ability to receive necessary equipment in a timely and cost efficient manner. As part of the
construction process, we have placed orders for certain items of equipment. However, we are yet to place
orders for large number of equipment. If we do not receive any such equipment in a timely manner, on
favourable terms or at all, the construction of our studio may be delayed or prevented, which could
adversely affect our results of operations.
267
Employee benefits Expenses: In order to successfully manage and expand our business, we are dependent on
the services of key management personnel and our ability to attract, train, motivate and retain skilled
employees, including artists, technicians and other professionals, which requires significant investments of
time and financial resources. Consequently, employee benefits expenses constitute a significant portion of
our total costs. As we add more products and services to our business and establish more cinema theatres,
our employee benefits expenses will increase as a result. In addition, if any of our employees unionise or
engage in work disruptions or stoppages, our employee benefits expenses may also increase. Changes in
labour regulations in India and in the overseas jurisdictions in which we operate may also affect the costs of
maintaining an adequate workforce.
Rent Expenses: Our ability to lease the properties at which we operate our cinema theatres at competitive
rates is a key driver of our costs. We operate all but four of our cinema theatres through lease arrangements,
business conducting agreements and management agreement for terms ranging from 3 to 30 years. . In the
event that a lease or a business conducting agreement or management agreement is not renewed, we will be
required to expend time and financial resources to relocate the cinema theatre which may adversely affect
our financial condition. Any adverse changes in our ability to lease properties at competitive rates may
adversely affect our results of operations.
Competitive Environment
In our theatrical exhibition business, we face competition from other cinema theatre chains and standalone
cinema theatre operators. We also face competition from alternative film delivery methods, including cable
television, the Internet, digital video disc, satellite and pay-per-view services. In addition, technologies currently
under development or that may be developed in the future, if employed by our existing theatrical exhibition
business competitors or new entrants, may adversely affect our competitiveness. Our competitors may be able to
deploy new technologies before us or we may be unable to adapt to new technologies, and we cannot predict
how emerging and future technological changes will affect our operations or the competitiveness of our
services. Changes in any of these factors may adversely affect the competitiveness of our theatrical exhibition
business and consequently, our results of operations.
We also face significant competition in our film production services business, including from local laboratories
in southern India, where certain competitors are also the producers and distributors of regional films, which
provides them with certain competitive advantages in relation to costs and business relationships. In digital film
processing industry, we face competition from existing entities. Some of these entities have longer operating
histories and greater financial resources than us. Our ability to compete in the film production services business
depends in significant part on our ability to adapt to technological trends and offer competitive rates for our
services. Any reduction in our ability to compete in the film production services business may adversely affect
our results of operations.
In our television production and distribution business, we primarily create non-fiction content, which is an
emerging business in India dominated by a few key entities. Our success in this line of business would depend
on our and our competitors‟ ability to predict and cater to viewer preferences.
Success of Films
The success of the films we exhibit affects the revenue we generate in our theatrical exhibition business. Our
potential cinema theatre patrons may be inclined to visit our theatres in significant part based on the appeal of
the films we exhibit, irrespective of the services, technologies and amenities we offer. The availability of more
successful films in our cinema theatres results in higher patronage and longer running films, and as a result,
increased revenues from ticket sales, food and beverage sales and other revenue streams related to our cinema
theatres. Our theatrical exhibition business revenues are driven in significant part on the availability of popular
films that are well accepted by broad audiences.
Ability to Borrow at Favourable Rates
Our business requires significant amounts of capital expenditure and working capital. We have generally
resorted to borrowings to meet our capital expenditure requirements. As an Indian company, we are subject to
exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing
sources for our operations and could constrain our ability to obtain financing on favourable terms and refinance
268
existing indebtedness. In addition, certain of our financing agreements include conditions and restrictive
covenants that require us to obtain consents from the respective lenders prior to carrying out certain activities
and entering into certain transactions. Any future changes in regulatory restrictions or in the terms typically
found in our indebtedness agreements may adversely affect our ability to borrow at favourable rates, which may
in turn adversely affect our results of operations.
Changes in Interest and Foreign Exchange Rates
The entirety of our investments in our foreign operations and revenues generated from our foreign operations
are denominated in foreign currencies. Change in the relevant foreign exchange rates could occur for a variety
of reasons and may adversely affect the returns from these investments and the revenues generated. For
instance, such changes in exchange rates could result from a decline in India‟s foreign exchange reserves. In the
future, adverse changes in interest and foreign exchange rates may adversely affect our results of operations.
Changes in Economic Conditions
Our results of operations are highly dependent on the overall economic conditions in India and in the foreign
jurisdictions in which we operate. Our theatrical film exhibition business is our largest source of revenue.
Cinema theatre attendance is a discretionary expense for our potential customers and thus may be particularly
reduced in times of negative economic conditions. Any slowdown in the Indian economy or in the economies of
the overseas jurisdictions in which we operate, due to, among other things, changes in interest rates, government
policies, taxation, social and civil unrest and political, economic or other developments, could adversely affect
our business and results of operations.
Restrictions on ability to fund our foreign subsidiaries
Our ability to fund our foreign subsidiaries is connected to our networth. Our stand-alone and consolidated
networth, as restated as on September 30, 2012, was ` (20,451.53) lakhs and ` (58,149.80) lakhs, respectively.
Our networth has eroded which has impaired our ability to fund our foreign subsidiaries, consequently, our
growth and results of operations may be adversely impacted.
Changes in Government Policies and Regulations
We are affected by changes in a variety of government policies and regulations that affect the operations of our
businesses in India. For instance, we are affected by changes in government policies regarding investment in
overseas subsidiaries. These policies are governed by the relevant authority for foreign investment in those
countries. In addition, we are eligible for exemptions from the payment of entertainment taxes in respect of 5 of
our cinema theatres on the basis of policies of certain State governments, such as Maharashtra, Madhya Pradesh,
Uttar Pradesh and Punjab. We are eligible for exemptions from the payment of a specified percentage of the
entertainment taxes for a period of up to five years on a staggered basis from the date of commencement of
operations in respect of 5 theatres in Maharashtra, Madhya Pradesh, and Uttar Pradesh, subject to the fulfilment
of certain conditions required by the regulation. In addition, we are eligible for an exemption from payment of
entire entertainment tax payable in respect of six theatres in Punjab and six theatres in Rajasthan throughout the
life of such theatres. In the future, if we are unable to avail of such exemptions, our results of operations could
be adversely affected. Cinema theatres in the states of Delhi, Punjab and Haryana are governed by the
provisions of the Punjab Cinemas (Regulation) Act, 1952, as amended, under which the licensee must comply
with ticket prices approved by the licensing authority. The said prices may be changed only with the prior
intimation of the licensing authority and in Delhi, the prices may not be changes more than six times in a year..
In the event these restrictions prevent us from increasing the ticket prices as may be required by us, it may affect
the results of our operations.
Our Significant Accounting Policies
Preparation of Consolidated Financial Statements
Our consolidated financial statements have been prepared in accordance with AS 21 – „Consolidated Financial
Statements‟, AS 23 – „Accounting for Investments in Associates in Consolidated Financial Statements‟ and AS
27 – „Financial Reporting of Interest in Joint Ventures‟. Our consolidated financial statements are prepared
using uniform accounting policies for transactions and other events in similar circumstances, except where it is
not practicable to do so. Our consolidated financial statements are presented to the extent possible, in the same
269
format as that adopted by our Company for our independent financial statements. Our consolidated financial
statements have been consolidated on the following basis:
Subsidiaries: The excess of our cost of our investment in subsidiaries over our portion of equity in the
subsidiaries at the respective dates on which investment in such subsidiaries was made is recognised in
our financial statements as goodwill and any excess of assets over our investment in a subsidiary is
transferred to the capital reserve. Our portion of equity in our subsidiaries is determined on the basis of
the book value of assets and liabilities in accordance with the financial statements of our subsidiaries as
of the date of the investment.
The financial statements of our Company and our subsidiaries have been combined on a line-by-line
basis by adding together the book values of like items of assets, liabilities, income and expenses, after
eliminating intra-group balances and transactions and resulting unrealised profits in full. The amounts
shown in respect of reserves and accumulated losses comprise the reserve or accumulated losses in
accordance with the balance sheet of our Company and our share in the post-acquisition increase or
decrease in the relevant reserves or accumulated losses of our subsidiaries.
The amount of goodwill and capital reserve are presented on a net basis for each subsidiary.
The minority interest‟s share of profits or losses is adjusted against the income to arrive at the net
income attributable to the shareholders. The minority interest‟s share of net assets is disclosed
separately in the balance sheet.
During Fiscal 2012:
o We sold our entire shareholding in Sri Ramakrishna Theatres Limited, Rave Entertainment
and Food Nepal Private Limited, Reliance MediaWorks (Malaysia) Sdn. Bhd. and Reliance
MediaWorks Big Cinemas Sdn. Bhd. our subsidiaries in May 2011, April 2012 and September
2012 respectively.
o We sold our entire shareholding shares in a joint venture viz., Cineplex Private Limited in
June 2011.
o We incorporated new subsidiaries Reliance Media Consultant Private Limited and Reliance
MediaVentures Private Limited with effect from February 16, 2012 and June 19, 2012.
During Fiscal 2011:
o We sold our entire shareholding in Sultan Production Private Limited
o We dissolved three LLCs in the United States viz., Adlabs Heritage LLC, Adlabs Digital
Media LLC and Adlabs GlobalStar LLC.
o As part of a settlement with its minority holders, we acquired the balance 49% stake in Big
Cinemas Galaxy LLC.
Joint Venture Entities: Interest in jointly controlled entities are accounted for using the proportionate
consolidation method.
The list of subsidiaries considered in our consolidated financial statements with percentage
shareholding for Fiscal 2012 is summarised below:
Name of Subsidiary Country of Incorporation Ownership Interest Fiscal
2012 ended (%)
Reliance MediaWorks Theatres
Limited
India 100%
Reliance MediaWorks (UK)
Limited
United Kingdom 100%
Reliance MediaWorks (USA) Inc. United States 100%
Reliance MediaWorks
(Netherlands) B.V.
The Netherlands 100%
270
Name of Subsidiary Country of Incorporation Ownership Interest Fiscal
2012 ended (%)
Reliance MediaWorks (Mauritius)
Limited
Mauritius 100%
Big Synergy Media Limited India 51%
Rave Entertainment and Food
Nepal Private Limited (4)
Nepal Nil
Reliance MediaWorks
Entertainment Services Limited
India 100%
Reliance Media Consultant Private
Limited
India 100%
Reliance MediaVentures Private
Limited
India 100%
Adlabs Multiplex Limited (1)
India N.A.
Rave Entertainment Private Limited (1)
India N.A.
Adlabs Multiplex and Theatres
Limited (1)
India N.A.
Katch 22 Entertainment Private
Limited (2)
India N.A.
Reliance Broadcast Network
Limited (3)
India N.A.
Sri Ramakrishna Theatres Limited (4)
India N.A.
(1) It was amalgamated with our Company in Fiscal 2009. (2) It was amalgamated with our Company in Fiscal 2008. (3) It ceased to be our subsidiary from Fiscal 2009 pursuant to a scheme of demerger. (4) It ceased to be a subsidiary pursuant to sale of shares in Fiscal 2012.
The list of step-down subsidiaries considered in our consolidated financial statements with percentage
shareholding in Fiscal 2012 is summarised below:
Name of Subsidiary Country of
Incorporation
Name of Parent
Company
Ownership Interest
in Fiscal 2012 (%)
BIG Cinemas
Entertainment LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas
Entertainment (DE) LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Adlabs Forum LLC (1)
United States Reliance MediaWorks
(USA) Inc.
N.A.
BIG Cinemas Laurel LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas Falls Church
LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Adlabs Heritage LLC (2)
United States Reliance MediaWorks
(USA) Inc.
N.A.
BIG Cinemas Norwalk
LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas Galaxy LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas Sahil LLC
United States Reliance MediaWorks
(USA) Inc.
97%
BIG Cinemas SAR LLC
United States Reliance MediaWorks
(USA) Inc.
51%
Phoenix BIG Cinemas
Management LLC
United States Reliance MediaWorks
(USA) Inc.
51%
Big Cinemas Union LLC (1)
United States Reliance MediaWorks N.A.
271
Name of Subsidiary Country of
Incorporation
Name of Parent
Company
Ownership Interest
in Fiscal 2012 (%)
(USA) Inc.
BIG Cinemas Phoenix
LLC
United States Reliance MediaWorks
(USA) Inc.
51%
BIG Cinemas Exhibition
LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas IMC LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Big Pictures USA Inc.
United States Reliance MediaWorks
(USA) Inc.
100%
Adlabs Digital Media LLC (2)
United States Reliance MediaWorks
(USA) Inc.
N.A.
Reliance Media and
Marketing
Communications LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Reliance Lowry Digital
Imaging Services Inc.
United States Reliance MediaWorks
(USA) Inc. – 90%
Our Company – 10%
100%
Reliance Media Works
VFX Inc.
United States Reliance MediaWorks
(USA) Inc.
100%
Reliance MediaWorks
(Malaysia) Sdn. Bhd. (3)
Malaysia Reliance MediaWorks
(Mauritius) Limited
Nil
Reliance MediaWorks Big
Cinemas Sdn. Bhd. (3)
Malaysia Reliance MediaWorks
(Malaysia) Sdn. Bhd.
Nil
(1) Dissolved in Fiscal 2010 (2) Dissolved in Fiscal 2011 (3) Ceased to be subsidiary pursuant to sale of shares in Fiscal 2012
The list of joint venture entities considered in our consolidated financial statements with percentage
shareholding is summarised below:
Name of Joint Venture Country of
Incorporation
Ownership Interest in
Fiscal 2012 (%)
Swanston Multiplex Cinemas Private
Limited
India 50%
Divyashakti Marketing Private Limited
India 50%
Cineplex Private Limited (1)
India N.A. (1) Ceased to be a Joint Venture pursuant to sale of shares in Fiscal 2012
Key accounting policies that are relevant and specific to our business and operations are as follows:
Basis of Preparation: The summary statements of the subsidiaries, joint ventures and associate
companies used in the consolidation are for the same reporting period as our Company. These financial
statements are audited by the auditors of the respective entities.
Our financial statements have been prepared to comply in all material respects with the requirements of
the Schedule II of the Companies Act, 1956 (the “Act”) and the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009, to the extent applicable.
Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011
(as amended by notification no. F. No/2/6/2008-CL-V dated March 30, 2011), read with General
Circular no. 62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised
Schedule VI notified under the Act has become applicable to the Company for the purpose of
272
preparation and presentation of its summary statements. The adoption of revised Schedule VI does not
impact the recognition and measurement principles followed for preparation of summary statements.
All assets and liabilities have been classified as current or non-current as per the Company‟s normal
operating cycle and other criteria set out in the revised Schedule VI.
Use of Estimates: The preparation of financial statements in conformity with GAAP in India requires
us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosures of contingent liabilities on the date of the financial statements and the reported amount of
income and expenses during the reported period. We believe that the estimates made in the preparation
of financial statements are reasonable. Actual results could differ from those estimates. Any revision to
accounting estimates is recognised prospectively in current and future periods.
Goodwill on consolidation: The excess of cost to the parent company of its investments over its
portion of equity in the subsidiaries / associates / joint ventures, as at the date on which the investment
was made, is recognised as goodwill in the financial statements. Our portion of equity in the
subsidiaries / associates / joint ventures‟ is determined on the basis of the book value of assets and
liabilities as per the financial statements of the subsidiaries as on the date of investment.
Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. We assess the
recoverability of goodwill by reference to the valuation methodology adopted by us on the acquisition
date, which included strategic and synergic factors that were expected to enhance the enterprise value.
Accordingly, we would consider that there exists a decline other than temporary in the carrying value
of goodwill when, in conjunction with its valuation methodology, its expectations with respect to the
underlying acquisitions we have made deteriorates with adverse market conditions.
Fixed Assets and Depreciation / Amortisation:
o Tangible Assets: Tangible fixed assets are stated at cost or revalued amount in accordance
with the scheme of amalgamation less accumulated depreciation and any provision for
impairment. Cost includes freight, duties, taxes (other than those recoverable from tax
authorities) and other expenses related directly or indirectly to the acquisition or construction
and installation of the fixed assets and for bringing the asset to its working condition for its
intended use. Depreciation on fixed assets is provided on the straight line method, at the rates
prescribed in Schedule XIV to the Act, which, in our opinion, reflects the estimated useful
lives of those fixed assets, except assets of subsidiaries, namely Reliance MediaWorks (USA)
Inc. (including its subsidiaries), Reliance MediaWorks (UK) Limited and Swanston Multiplex
Cinemas Private Limited and our theatrical exhibition segment in India wherein depreciation
is provided at following rates:
Plant and machinery: 7.07% to 20%
Furniture and fixtures: 10% to 25%
Computers: 20%
Motor cars: 10%
Office equipment: 10%
Leasehold improvements / buildings are depreciated over the lower of useful life of the asset
and lease term, on a straight line basis. Individual assets costing up to ` 0.05 lakhs are
depreciated fully in the year of acquisition.
o Intangible Assets: Intangible assets, all of which have been acquired or created and are
controlled through custody or legal rights, are capitalised at cost, where they can be reliably
measured. Where capitalised, intangible assets are regarded as having a limited useful
economic life and the cost is amortised over the lower of useful life or ten years.
273
Application software purchased, which is not an integral part of the related hardware, is shown
as intangible assets and amortised on a straight line basis over its useful life, not exceeding
five or ten years, as determined by us.
Film rights comprise negative rights and distribution rights in films and are for a contractually
specified mode of exploitation, period and territory and are stated at cost less accumulated
amortisation. Cost of film rights comprises original purchase price or minimum guarantee.
Cost is ascertained on a specific identification basis where possible. In case multiple films or
rights are acquired for a consolidated amount, cost is allocated to each film / right based on
management‟s best estimates.
The individual film forecast method is used to amortise the cost of film rights acquired. Under
this method, costs are amortised in the proportion that gross revenues realised bear to our
estimate of the total gross revenues expected to be received. If estimates of the total revenues
and other events or changes in circumstances indicate that the realisable value of a right is less
than its unamortised cost, a loss is recognised for the excess of unamortised cost over the film
right‟s realisable value.
In respect of unreleased films, payments towards film rights are classified under capital
advances as the amounts are refundable in the event of non-release of the film.
Internally generated software is capitalised by the Company and amortised over its estimated
useful life of five / ten years.
Purchased goodwill is recognised by us on the basis of excess of purchase consideration paid
over the value of the assets acquired at the time of acquisition and is amortised over its
estimated useful life not exceeding ten years.
Impairment: In accordance with Accounting Standards 28 – „Impairment of Assets‟, where there is an
indication of impairment of our asset, the carrying amounts of our assets are reviewed at each balance
sheet date to determine whether there is any impairment. The recoverable amount of the asset (or where
applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its
net selling price and its value in use. An impairment loss is recognised whenever the carrying amount
of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in
the statement of profit and loss.
If at the Balance sheet date there is an indicator that a previously assessed impairment loss no longer
exists, the recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject
to a maximum depreciated historical amount.
Value in use is the present value of estimated future cash flows expected to arise from the continuing
use of the asset and from its disposal at the end of its useful life.
Investments: Long-term investments are carried at cost. A provision for diminution is made to
recognise a decline, other than temporary, in the value of long-term investments and is determined
separately for each individual investment. Current investments are carried at lower of cost and fair
value.
Inventories: Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon
lamps and stores and spares related to theatrical exhibition / film production services business etc.) are
stated at the lower of cost and net realisable value. Cost is determined on the first-in first out basis,
except in the case of Reliance MediaWorks (USA) Inc. (and its subsidiaries), wherein we use the
weighted average method. Inventory of DVDs is stated at lower of cost and net realisable value.
Employee benefits:
o Short Term Employee Benefits: All employee benefits payable wholly within 12 months of
rendering the service are classified as short term employee benefits. The undiscounted amount
of short term employee benefits expected to be paid in exchange for the services rendered by
employees are recognised as an expense during the period.
274
o Long Term Employee Benefits:
Provident Fund and Other Schemes: Our state governed provident fund scheme,
employee state insurance scheme and labour welfare fund are defined contribution
plans. The contribution paid or payable under the schemes is recognised during the
year in which the employee renders the related service.
Gratuity Plan: Our gratuity benefit scheme is a defined benefit plan. Our net
obligation in respect of the gratuity benefit scheme is calculated by estimating the
amount of future benefit that employees have earned in return for their service in the
current and prior year; that benefit is discounted to determine its present value and
the fair value of any plan assets is deducted. The present value of the obligation
under such defined benefit plan is determined based on actuarial valuation using the
Projected Unit Credit Method. The obligation is measured at the present value of the
estimated future cash flows. The discount rates used for determining the present
value of the obligation under defined benefit plan, are based on the market yields on
Government Securities as at the Balance Sheet date. Actuarial gains and losses are
recognised immediately in the statement of Profit and Loss.
Other Long Term Employment Benefits: Compensated absences which are not
expected to occur within twelve months after the end of the period in which the
employee renders the related services are recognised as a liability at the present value
of the defined benefit obligation at the Balance Sheet date, determined based on
actuarial valuation using Projected Unit Credit Method. The discount rates used for
determining the present value of the obligation under defined benefit plan, are based
on the market yields on Government Securities as at the Balance Sheet date.
Revenue Recognition: Revenue is recognised to the extent that it is probable that the economic
benefits will flow to us and the revenue can be reliably measured. The amount recognised as sales is
exclusive of value added tax and service tax and net of trade discounts. Amount of entertainment tax is
shown as a reduction from revenue.
o Film Production Services Income: Revenue from processing or printing of cinematographic
films is recognised upon completion of the related processing / printing. Revenue from
processing of digital content is recognised using the proportionate completion method. Use of
the proportionate completion method requires us to estimate the efforts expended to date as a
proportion of the total efforts to be expended. Efforts expended have been used to measure
progress towards completion, as there is a direct relationship between efforts expended and
contracted output. Sale of traded goods is recognised when the risks and rewards of ownership
are passed on to the customer, which generally coincides with the dispatch of goods. Income
from equipment or facility rental is recognised over the period of the relevant agreement or
arrangement.
o Theatrical Exhibition and Related Income:
Sale of tickets: Revenue from theatrical exhibition is recognised on the date of the
exhibition of the films and comprises proceeds from sale of tickets, gross of
entertainment tax. As we are the primary obligor with respect to exhibition activities,
the share of distributors in these proceeds is separately disclosed as distributors‟
share. Amount of entertainment tax is shown as a reduction from revenue
Revenue from gift cards is recognised on the basis of availing the facility by the
customer. At the time of sale, the amounts received are recognised as deferred
revenue.
Share of profit in partnership firm is recognised on the basis of audited financial
statement of the Partnership firm.
275
Sale of food and beverages: Revenue from sale of food and beverages is recognised
upon sale and delivery at the counter.
Advertisement / sponsorship revenue: Revenue from advertisements, sponsorship and
events is recognised on the date of the exhibition of the advertisement or event, over
the period of the contract or on completion of our obligations, as applicable.
Management fee is recognised as revenue on a time proportion basis as per the
relevant agreement.
o Television/ Film Production and Related Income: Revenue from sale of content or motion
pictures is accounted for on the date of agreement to assign or sell the rights in the concerned
content or motion picture or on the date of release of the content or motion picture, whichever
is later. Program sales are accounted on the delivery of tape to the channel.
o Income from Film Distribution Activity: In case of distribution rights of motion pictures or
content, revenue is recognised on the date of release or exhibition. Revenue from other rights
such as satellite rights, overseas rights, music rights or video rights is recognised on the date
when the rights are made available to the assignee for exploitation. Revenue from sale of
VCDs/ DVDs is recognised when the risks and rewards of ownership are passed on to the
customer, which generally coincides with the dispatch of the products.
o Interest Income or Income from Film Financing: Interest income, including from film or
content related production financing, is recognised on a time proportion basis at the rate
implicit in the transaction.
o Dividend Income: Dividend income is recognised when the right to receive dividend is
unconditional at the balance sheet date.
o Marketing Rights or Rights to Profit: Amounts received in lieu of future marketing rights sale,
right to future profit from our business and other rights are recognised as income in the period
of entering into the contract.
Foreign Currency Transactions: Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transactions. Exchange differences arising on foreign
exchange transactions settled during the year are recognised in the statement of profit and loss of the
period. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date
are translated at the closing exchange rates on that date; the resultant exchange differences are
recognised in the statement of profit and loss except in case of exchange differences arising on
translation of monetary items which form part of our net investment in a non-integral foreign operation
which is accumulated in a „foreign currency translation reserve‟ until its disposal. Non-monetary items
which are carried at historical cost denominated in a foreign currency are reported using the exchange
rate at the date of the transaction. Forward contracts are entered into to hedge the foreign currency risk
of the underlying transaction. The premium or discount on all such contracts arising at the inception of
each contract is amortised as income or expense over the life of the contract. Exchange difference on
forward contracts are recognised as income or expense in the statement of profit and loss of the period.
Any profit or loss arising on the cancellation and renewal of forward contract is recognised as income
or expense for the period.
Foreign Currency Translation: The consolidated financial statements are reported in Indian rupees in
accordance with AS-11 – „The Effects of Changes in Foreign Exchange Rates‟ which specifies
translation of foreign subsidiaries on the basis of their classification as integral / non-integral to the
operations of the parent company.
Local currency financials of each integral foreign subsidiary into Indian Rupees is performed in respect
of assets and liabilities other than fixed assets, using the exchange rate in effect at the balance sheet
date and for revenue and expense items other than the depreciation costs, using average exchange rate
during the reporting period. Net exchange difference resulting from the above translation of the
financial statements of integral foreign subsidiaries is recognised in the consolidated statement of profit
276
and loss. Fixed assets are translated at exchange rates on the date of the transaction and depreciation on
fixed assets is translated at exchange rates used for translation of the underlying fixed assets.
Translation of local currency balances of each non-integral foreign subsidiary into Indian Rupees is
performed in respect of assets and liabilities at the exchange rate in effect at the balance sheet date and
for revenue and expense items at the average exchange rate during the reporting period. Net exchange
differences resulting from the above translation of the financial statements is accumulated in a „Foreign
currency translation reserve‟, disclosed as reserves and surplus. The amount accumulated will be held
in this account till the time of disposal of the net investment in the subsidiary.
Leases: Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases
are recorded on a straight line basis over the lease term.
Borrowing costs: Borrowing costs that are attributable to the acquisition, construction or production of
qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that
necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs
are charged to revenue.
Recent Changes in Accounting Policies
1. Change in Accounting Policy for Depreciation, amortisation and impairment expense
During Fiscal 2009, we have charged depreciation as per the written down value method in the film
production services, production and distribution business and for unallocated assets at the rates
specified in Schedule XIV of the Companies Act till March 31, 2008. Commencing from April 1, 2008,
we changed our policy to charge depreciation as per the straight line method at the rates specified in
Schedule XIV of the Companies Act. For further details, please see the chapter entitled “Financial
Statements – Significant accounting policies and notes to the restated summary statements of the Group
– Significant changes in accounting policies and other adjustments (debited) / credited to the restated
financial statements on page F1
Our Business Segments
Our business is divided into three segments on the basis of the nature of the businesses, the differing risks and
returns, the organisation structure and our internal reporting systems:
(a) Theatrical Exhibition: Theatrical exhibition operations comprise of single screen, multiplex, IMAX
cinema exhibition and a range of activities and services offered at our cinema theatres including
catering food and beverages.
(b) Film Production Services: Film production services primarily comprise of processing of raw exposed
films, colour correction, editing, digital processing, visual effects, equipment rental, copying and
printing of positive exhibition prints and trading in raw film rolls.
(c) Television, Film Production, Distribution and related services: Television and film production and
distribution operations comprise of the production of television or film content which is produced or
co-produced by us and includes relates services of financing for production of films. Film distribution
operations comprise of our share of revenue from exploitation and distribution rights acquired by us,
which may include as a package, theatrical rights and video and television rights.
277
The following table summarises our consolidated income and operating profit from our three business segments, for
the Fiscals 2012, 2011, 2010 and 2009: (in ` lakhs except percentage amounts)
Busines
s
Segmen
t
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Incom
e
% of
Total
Incom
e of
Three
Segm
ents
Operat
ing
Profit/
(Loss)
Inco
me
% of
Total
Incom
e of
Three
Segm
ents
Operat
ing
Profit/
(Loss)
Inco
me
% of
Total
Incom
e of
Three
Segm
ents
Opera
ting
Profit/
(Loss)
Inco
me
% of
Total
Incom
e of
Three
Segm
ents
Opera
ting
Profit/
(Loss)
Theatric
al
Exhibiti
on#
86,307.
50
69.99
%
(30,380
.83)
54,67
8.30
65.39
%
(10,398
.60)
46,72
4.80
64.37
%
(4,953.
70)
33,17
1.14
50.31
%
(4,545.
60)
Film
Producti
on
Services#
27,802.
90
22.55
%
(13,833
.12)
23,26
5.50
27.83
%
(477.60
)
15,76
4.30
21.72
%
3,067.
42
13,05
7.00
19.80
%
3,538.
96
Film
Producti
on and
Distribu
tion#
9,195.0
0 7.46%
1,965.8
0
5,670.
50 6.78%
1,150.0
0
10,09
9.00
13.91
%
4,011.
00
19,70
7.20
29.89
%
3,187.
33
Total 123,30
5.40
100.0
0%
(42,248
.15)
83,61
4.30
100.0
0%
(9,726.
20)
72,58
8.10
100.0
0%
2,124.
72
65,93
5.34
100.0
0%
2,180.
69
# This includes part of Other Income allocated to each of our business segments and does not include unallocated
revenue.
Additionally, we have considered our overseas operations as separately identifiable geographic segments due to
substantial operations in the US and Malaysia. The following table summarises our consolidated income from our
four geographic segments, for the Fiscals 2012, 2011, 2010 and 2009:
(in ` lakhs except percentage amounts)
Geographic
Segments
Fiscal 2012* Fiscal 2011* Fiscal 2010* Fiscal 2009*
Income % of
Total
Income
of Three
Segments
Income % of
Total
Income
of Three
Segments
Income % of
Total
Income
of Three
Segments
Income % of
Total
Income
of Three
Segments
India 89,526.60 72.61% 60,277.90 72.09% 50,012.80 68.90% 52,324.04 79.36 %
United States of
America
20,636.40 16.74% 16,234.10 19.41% 15,679.80 21.60% 11,540.00 17.50%
Malaysia 9,427.20 7.65% 5,615.70 6.72% 4,970.80 6.85% 1,491.10 2.26%
Others 3,715.20 3.01% 1,486.60 1.78% 1,924.70 2.65% 580.20 0.88%
Total 123,305.40 100.00% 83,614.30 100.00% 72,588.10 100.00% 65,935.34 100.00%
* This includes part of Other Income allocated to each of our business segments and does not include unallocated
revenue.
Consolidated Results of Operations
278
The following table provides certain information with respect to our consolidated results of operations for Fiscals
2012, 2011, 2010 and 2009, as set forth in our audited restated consolidated financial statements. (in ` lakhs except percentage amounts)
Particulars Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Amoun
t (` in
lakhs)
% of
Total
Incom
e
Amount
(` in
lakhs)
% of
Total
Incom
e
Amount
(` in
lakhs)
% of
Total
Incom
e
Amoun
t (` in
lakhs)
% of
Total
Incom
e
Revenue from operations
123,441
.40
98.37
%
79,207.4
0
93.16
%
71,507.2
0
95.64
%
65,935.
34
90.17
%
Other income
2,045.5
0 1.63% 5,818.80 6.84% 3,256.70 4.36%
7,184.9
0 9.83%
Total revenue
125,486
.90
100.0
0%
85,026.2
0
100.0
0%
74,763.9
0
100.0
0%
73,120.
24
100.0
0%
Expenditure
Direct operational expenses
49,304.
20
39.29
%
31,059.8
0
36.53
%
28,102.0
0
37.59
%
23,868.
30
32.64
%
Employee benefits expense
31,712.
30
25.27
%
20,979.8
0
24.67
%
13,179.3
0
17.63
%
10,147.
60
13.88
%
Other expenses
65,209.
31
51.97
%
34,672.9
6
40.78
%
25,317.0
5
33.86
%
20,056.
90
27.43
%
Finance costs (net)
39,751.
40
31.68
%
17,514.2
0
20.60
%
11,717.2
0
15.67
%
12,447.
20
17.02
%
Depreciation, amortization and
impairment expense
21,335.
50
17.00
%
13,226.5
0
15.56
% 9,729.44
13.01
%
13,542.
41
18.52
%
Total expenses
207,312
.71
165.2
1%
117,453.
26
138.1
4%
88,044.9
9
117.7
6%
80,062.
41
109.4
9%
Loss before exceptional items, tax,
minority interest and share in
associates
(81,825
.81)
(65.21
%)
(32,427.
06)
(38.14
)%
(13,281.
09)
(17.76
)%
(6,942.1
7)
(9.49)
%
Exceptional items
(8,181.
50)
(6.52
%)
Loss before tax, minority interest and
share in associates
(90,007
.31)
(71,73
%)
(32,427.
06)
(38.14
)%
(13,281.
09)
(17.76
)%
(6,942.1
7)
(9.49)
%
Less: Provision for tax
- Current tax 769.50 0.61%
113.90 0.13%
39.61 0.05%
414.91 0.57%
- Deferred tax credit / (charge)
(492.59
)
(0.39
%)
452.69 0.53%
13.25 0.02%
(69.44)
(0.09)
%
- Fringe benefit tax - -
- 0.00%
- 0.00%
171.70 0.23%
Loss after tax and before minority
interest
(90,284
.22)
(71.95
%)
(32,993.
65)
(38.80
)%
(13,333.
95)
(17.83
)%
(7,459.3
4)
(10.20
)%
Add: Share in profit of associate
Less: (Loss) / profit transferred to
Minority interest 732.40 0.58%
(196.70)
(0.23)
%
(530.87)
(0.71)
%
(322.12)
(0.44)
%
Net loss after tax before adjustment
pursuant to Schemes
(91,016
.62)
(72.53
%)
(32,796.
95)
(38.57
)%
(12,803.
08)
(17.12
)%
(7,137.2
2)
(9.76)
%
279
Particulars Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Amoun
t (` in
lakhs)
% of
Total
Incom
e
Amount
(` in
lakhs)
% of
Total
Incom
e
Amount
(` in
lakhs)
% of
Total
Incom
e
Amoun
t (` in
lakhs)
% of
Total
Incom
e
Less: Adjustment pursuant to Radio
Scheme of Arrangement / Scheme of
Amalgamation
- - - - (649.30)
(0.89)
%
Net loss as restated
(91,016
.62)
(72.53
%)
(32,796.
95)
(38.57
)%
(12,803.
08)
(17.12
)%
(7,786.5
2)
(10.65
)%
INCOME
Our income comprises income from our operations and other income, each of which is described below.
Income from operations
Our income from operations is primarily comprised of income from our various businesses: theatrical exhibition,
film production services and television and film content production and distribution.
Theatrical Exhibition
The theatrical exhibition of films is our primary business and largest source of revenue, which is generated from the
sale of admission tickets, food and beverage sales, the sale of advertisement space and the utilisation of other
facilities in our cinema theatres.
Film Production Services
Our film production services business is our second largest source of revenue, which is generated from the operation
of services related to film processing, film negatives trading, equipment rental, post-production and film restoration.
Television and Film Production and Distribution
We acquire various rights including the right to theatrical exhibition in India and overseas territories and home
viewing format rights for films for distribution on a commission basis or on an overflow basis for our distribution
business. We typically acquire the rights to films that are under production or are at a conceptual stage. We also
engage in the co-production of films. Where we have co-produced films we realise our revenue from these films
including through the sale of rights for theatrical releases and satellite broadcast. BIG Synergy Media Limited, one
of our subsidiaries is engaged in the production of television content.
Interest Income
Interest income is primarily generated from certain fixed deposits that we maintain. We also generate interest
income from loans given to our employees and interest on inter-corporate deposits.
Other Income
Our other income primarily includes both recurring and non-recurring income. The recurring components of our
other income include dividend income, interest income, profit on sale of current investments, bad debts recovered,
provisions and sundry balances written back and foreign exchange gains. The non-recurring components of our
other income include profits on option contracts, sale and discarding of assets and sale of investments, profits from
insurance and share of advertisement income.
280
Expenditure
Our expenditure consists generally of operating expenses, employee benefits expenses, administrative expenses,
finance costs (net) and depreciation / amortisation.
Direct operational expenses
Our operating expenses primarily comprise the following:
the production and processing of film negatives for our film services business;
distributors‟ share in our theatrical exhibition business;
food and beverage costs;
overflow to producers; and
content production costs in the relation to our television and film content production and distribution
business.
Cost of Negative Films
The production and processing of film negatives is a significant cost in relation to our film production services
business. It primarily consists of the cost of negatives purchased by us for trading and utilisation during processing.
Distributors‟ Share in Our Theatrical Exhibition Business
In order to obtain the right to exhibit a film in our single-screen cinema theatres, we pay the distributor of the film a
certain fixed percentage of the relevant film‟s gross or net box office collections. In order to obtain the right to
exhibit a film in our multiplexes, we pay the distributor of the film a percentage of our revenue based on the overall
performance of the film at multiplexes in India, in accordance with the settlement agreement reached in May 2009
between the Multiplex Association of India and the Film & Television Producers‟ Guild of India. Pursuant to the
settlement agreement, we have entered into distribution agreements with major distributors in India which provide
for a sliding scale of payment of a distributor‟s share based on a film‟s performance. For the exhibition of films in
the United States, we enter into agreements with distributors in which a distributor‟s share typically ranges from
approximately 40.0% to 70.0% of box office collections, depending on the location of the cinema theatre and the
film.
Food and Beverage Costs
We purchase branded and unbranded food and beverage items from various vendors for preparation and sale in our
theatres and multiplexes. The cost of our food and beverage sales is determined by the type and quantity of items
purchased, the controls we institute to reduce wastage and the structure of the menu used in our theatres and
multiplexes.
Overflow to Producers
When we acquire film distribution rights, we typically are required to pay a minimum guarantee to the producer of
the content. Revenue received in excess of such minimum guarantee is shared between us and the producer,
according to terms of the relevant distribution agreement.
Content Production Costs
Content production costs relate to our television and film content production and distribution business and consist of
costs such as equipment rental, location rental, artist costs, other technical and profession personnel hiring and other
incidental expenses at film and television content production locations.
Electricity, power and water charges
281
Electricity, power and water charges are mainly pertaining to our theatrical exhibition business, wherein we incur
cost of utilities for operation of our theatres and also include cost of diesel for operation of generators for backup
power at our cinemas and facilities.
Employee Benefits Expense
Employee benefits expenses consist primarily of expenses incurred towards payment of salaries, allowances and
bonuses, contributions to the employees‟ provident fund and other welfare funds, gratuity and leave encashment and
other staff welfare expenses. Our employee benefits expenses have grown and are expected to continue to grow,
primarily due to the increase in the number of cinema theatres we operate and the expansion of our new businesses.
Other Expenses
Other expenses primarily include rent, legal and professional expenses, expenses for advertising and business
promotion, travelling and conveyance expenses, communication expenses, electricity charges, office, printing and
stationary expenses.
Rent
Lease rent for theatrical exhibition is a major component of our cost.
Finance Costs
Our finance costs include interest and charges payable on borrowings and loss on derivative contracts. Interest
primarily includes interest on borrowings paid to banks and financial institutions and interest paid to corporate
lenders on inter-corporate deposits. We borrow primarily to meet our capital expenditure requirements and meet
working capital shortfalls. Finance costs also include bank guarantee commissions paid to banks towards guarantees
given to our Subsidiaries, regulatory authorities and other officials in various states.
Depreciation and Amortisation Expense
We incur capital expenditure on lease improvements, plant and machinery, air conditioning equipment, theatrical
equipment, data processing equipment and office equipment. In our theatrical exhibition business, our plant and
machinery include, among others, our projectors, sound system equipment and equipment used for our concession
counters in our cinema theatres. In our film production services business, our plant and machinery include, among
others, laboratory equipment used for processing of film negatives, scanners for the processing of exposed film,
subtitling equipment and cameras for our equipment rental business.
Immoveable assets at our leased premises, which include civil works and electrical items, are capitalised as
leasehold assets and are amortised over the primary period of lease.
Depreciation is provided on the basis of “Straight Line Method”, at the rates specified in Schedule XIV of the
Companies Act or the rates based on useful lives of the assets as estimated by the management, whichever is higher.
Individual assets costing less than ` 0.05 lakhs are fully depreciated in the year of acquisition. The depreciation is
provided on pro rata basis on the assets acquired, sold or disposed of during the relevant year. The annual
depreciation rates are as provided below:
Asset Rate of Depreciation (%)
Plant and machinery 7.07% to 20%
Office equipment 10%
Furniture and fixtures 10% to 25%
Computers 20%
Vehicles 10%
282
Taxation
We are subject to income tax liability in India under the IT Act and overseas based on the relevant local laws of the
particular jurisdiction. In India, pursuant to the provisions of the IT Act we may also be liable to pay Minimum
Alternate Tax based on book profit. We make provision for current tax as well as for deferred tax liability based on
our anticipated utilisation of tax charges carried forward. We have made necessary provisions for fringe benefit tax
as well.
Provision for Taxation
Current Tax: Current tax is the provision made for income tax liability on the profits for the applicable financial
period in accordance with applicable tax laws.
Deferred Tax: Deferred tax arises from timing differences between book profits (accounting) and taxable profits that
originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured
using tax rates and laws that have been enacted or substantially enacted as of the date of our balance sheet.
Fringe Benefit Tax: In accordance with existing laws, we have provided for the necessary fringe benefit tax up to
and including Fiscal 2009.
Fiscal 2012 compared to Fiscal 2011
Our results of operations for Fiscal 2012 were primarily driven by the following key factors:
i) We started delivery for the Digital Domain Production Inc. contract from our centres in Mumbai, India and
London, United Kingdom.
ii) Subsequent bankruptcy of DDMG and acquisition of 30% controlling interest in Galloping Horse-Reliance LLC
all through a court approved process.
iii) Sale of our investments in Nepal and Malaysia in the exhibition bsuiness
Further, during the year:
i) We sold our entire shareholding in our subsidiaries Sri Ramakrishna Theatres Limited, Rave Entertainment and
Food Nepal Private Limited, Reliance MediaWorks (Malaysia) Sdn.Bhd. and Reliance MediaWorks Big
Cinemas Sdn. Bhd. and our Joint Venture Cineplex Private Limited.
ii) We incorporated a new subsidiaries Reliance Media Consultant Private Limited and Reliance MediaVentures
Private Limited with effect from February 16, 2012 and June 19, 2012.
Income
Our total income was ` 85,026.20 lakhs in Fiscal 2011 to ` 125,486.90 lakhs in Fiscal 2012, for the reasons
mentioned below.
Income from Operations
Our income from our operations was ` 79,207.40 lakhs for Fiscal 2011 and ` 123,441.40 lakhs for Fiscal 2012.
283
(In ` lakhs)
Particulars Fiscal 2012 Fiscal 2011
Amount % of Total
Income
Amount % of Total
Income
Theatrical exhibition
business:
Sale of tickets 68,030.50 54.21% 39,009.50 45.88%
Entertainment tax (10,885.50) (8.67)% (5,098.90) (6.00)%
Food and Beverage Sales 19,396.40 15.46% 10,716.70 12.60%
Advertisements / Sponsorship
revenue 3,498.40 2.79% 3,684.20 4.33%
Others 6,224.90 4.96% 3,066.40 3.61%
Total (a) 86,264.70 68.74% 51,377.90 60.42%
Film Production Services
Business:
Processing / printing of films 22,905.30 18.25% 18,794.00 22.10%
Equipment / facility rental
income 3,665.30 2.92% 2,084.60 2.45%
Trading income 1,304.30 1.04% 1,926.30 2.27%
Others 150.90 0.12% 44.30 0.05%
Total (b) 28,025.80 22.33% 22,849.20 26.87%
Income from television /
films distribution and
production and related
services (c) 9,150.90 7.29% 4,980.30 5.86%
Total Income from
Operations (a + b + c) 123,441.40 98.37% 79,207.40 93.16%
Income from Theatrical Exhibition Business
Income from theatrical exhibition business was ` 51,377.90 lakhs in Fiscal 2011 and ` 86,264.70 lakhs in Fiscal
2012.
Our sale of tickets income was ` 39,009.50 lakhs in Fiscal 2011 and ` 68,030.50 lakhs in Fiscal 2012.
Food and beverage sales income for Fiscal 2012 was ` 19,396.40 lakhs vis-à-vis sales of ` 10,716.70 lakhs for
Fiscal 2011. Food and beverage sales income as a percentage of gross box office collections is 27.47% for Fiscal
2011 and 28.51% for Fiscal 2012 reflecting our increased focus on food and beverage sales, our enhanced menu
offerings at our cinemas.
Advertisement / sponsorship income was ` 3,498.40 lakhs for Fiscal 2012 vis-à-vis ` 3,684.20 lakhs for Fiscal 2011.
Other revenue from exhibition business was ` 6,224.90 lakhs for Fiscal 2012 vis-à-vis ` 3,066.40 lakhs for Fiscal
2011.
Income from Film Production Services Business
Our income from film production services business was ` 28,025.80 lakhs for Fiscal 2012 vis-à-vis ` 22,849.20
lakhs for Fiscal 2011.
284
Income from processing and printing of films was ` 22,905.30 lakhs vis-à-vis ` 18,794.00 lakhs for Fiscal 2011. The
year witnessed reduction in the share of analogue revenue due to increased trend of digitisation of movies.
Income from equipment / facility rental income was ` 3,665.30 lakhs for Fiscal 2012 vis-à-vis ` 2,084.60 lakhs for
Fiscal 2011.
Our income from film negatives trading was ` 1,304.30 lakhs for Fiscal 2012 vis-à-vis ` 1,926.30 lakhs for Fiscal
2011.
Other film production services income increased was ` 150.90 lakhs for Fiscal 2012 vis-a-vis ` 44.30 lakhs for
Fiscal 2011.
Income from Television / Film Content Production and Distribution business
Our total income from our television / film content production and distribution business was ` 9,150.90 lakhs for
Fiscal 2012 vis-à-vis ` 4,980.30 lakhs for Fiscal 2011.
Other Income
Our other income for Fiscal 2012 was ` 2,045.50 lakhs vis-à-vis ` 5,818.80 lakhs for Fiscal 2011. During Fiscal
2011, we had profit on sale of fixed assets of ` 2,694.80 lakhs.
Expenditure (In ` lakhs)
Particulars Fiscal 2012 Fiscal 2011
Amount % of Total
Income
Amount % of Total
Income
Direct operational
expenses 49,304.20 39.29% 31,059.80 36.53%
Employee benefits
expense 31,712.30 25.27% 20,979.80 24.67%
Other expenses 65,209.31 51.97% 34,672.96 40.78%
Finance costs (net) 39,751.40 31.68% 17,514.20 20.60%
Depreciation,
amortisation and
impairment expense 21,335.50 17.00% 13,226.50 15.56%
Total Expenditure 207,312.71 165.21% 117,453.26 138.14%
Our expenditure was ` 207,312.71 lakhs for Fiscal 2012 vis-à-vis ` 117,453.26 lakhs for Fiscal 2011.
Direct Operating Expenses
Direct operating expenses were ` 49,304.20 lakhs for Fiscal 2012 and ` 31,059.80 lakhs for Fiscal 2011. A breakup
of our direct operating expenses is as mentioned below:
Particulars Fiscal 2012 Fiscal 2011
Amount
(` in
lakhs)
% of Total
Income
Amount
(` in
lakhs)
% of Total
Income
Distributors share 26,625.90 21.22% 16,027.20 18.85%
Print, publicity expenses and Producers
overflow
163.70 0.13% 253.30 0.30%
Cost of production for television content 4,995.50 3.98% 3,185.20 3.75%
Electricity, power and water charges 8,847.40 7.05% 5,140.90 6.05%
285
Particulars Fiscal 2012 Fiscal 2011
Amount
(` in
lakhs)
% of Total
Income
Amount
(` in
lakhs)
% of Total
Income
Cost of food and beverage sold 6,110.10 4.87% 3,382.40 3.98%
Cost of raw films sold 1,133.60 0.90% 1,667.10 1.96%
Processing charges 409.20 0.33% 332.10 0.39%
Other direct operational expenses 1,018.8 0.81% 1,071.60 1.26%
Total 49,304.20 39.29% 31,059.80 36.53%
Our revenue for television production was ` 4,334.55 lakhs in Fiscal 2011 and ` 8,825.23 lakhs in Fiscal 2012 and
our cost of production of television content was ` 3,185.20 lakhs for Fiscal 2011 and ` 4,995.50 lakhs. Our revenue
for television production less cost of production of television content in proportion to our revenue for television
production leads to a margin of 26.52% in Fiscal 2011 and 43.40% in Fiscal 2012.
Our cost of food and beverages has remained constant at about 31.50% of our sale of food and beverages.
Employee benefits expense
Our employee benefits expenses were ` 31,712.30 lakhs for Fiscal 2012 vis-à-vis ` 20,979.80 lakhs for Fiscal 2011.
As of September 30, 2012 we had 3,256 employees.
Other Expenses
Our other expenses were ` 65,209.31 lakhs for Fiscal 2012 vis-à-vis ` 34,672.96 lakhs for Fiscal 2011. The increase
is primarily on account of increased in our rent expenses.
Finance Costs
Our finance cost was ` 39,751.40 lakhs for Fiscal 2012 vis-à-vis ` 17,514.20 lakhs for Fiscal 2011, which included
the loss on derivative contracts of ` 5,966.80 lakhs in Fiscal 2012 and ` 2,166.90 lakhs in Fiscal 2011.
Our borrowings as of September 30, 2012 were ` 207,264.37 lakhs and ` 198,241.80 lakhs as of March 31, 2011.
We had borrowed a sum of ` 29,500 lakhs from Reliance Utility Engineers Private Limited and Reliance Infocomm
Engineering Private Limited in Fiscal 2012 towards repaying some of our outstanding obligations. These loans were
subsequently converted to preference shares on March 31, 2012, thereby augmenting our net-worth and reducing our
outstanding borrowings.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense was ` 21,335.50 lakhs for Fiscal 2012 vis-à-vis ` 13,226.50
lakhs for Fiscal 2011.
Exceptional items
During the current fiscal, the Company has recognised exceptional items of expenditure which consisted of:
i) Loss on sale of investment in subsidiaries in Malaysia, which operated in the theatrical exhibition business
aggregating to ` 2,722.90 lakhs.
286
ii) Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary of Digital
Domain Media Group Inc. ('DDMG') for various services rendered. On September 11, 2011, DDMG along
with all its subsidiaries filed for bankruptcy proceedings in the United States of America. The amount provided
for outstanding balances is ` 2,774.80 lakhs.
iii) Loss on Litigation settlement by US subsidiary of ` 2,683.80 lakhs. The subsidiary was a defendant in a law suit
regarding termination of a lease. During the previous year, the said subsidiary received an adverse order for
claim of damages by the landlord to the tune of USD 4.9 million. The US Supreme Court has denied an appeal
filed by the subsidiary Company. Accordingly, the Subsidiary has made a provision of ` 2,683.80 for such
claim along with other charges payable as per the order. Considering its nature same has been disclosed as an
exceptional item.
Tax
Tax expenses changed from ` 586.63 lakhs in Fiscal 2011 to ` 276.91 lakhs in the Fiscal 2012 due to reversal of
deferred tax recognised by us in earlier periods.
Minority Interest
Minority‟s share of profit was ` 732.40 lakhs in Fiscal 2012 as compared to minority‟s share of loss ` 196.70 lakhs
in Fiscal 2011.
(Loss)/Profit After Minority Interest After Adjustments pursuant to Schemes
Loss after minority interest after adjustments pursuant to Schemes changed from ` 32,816.99 lakhs in Fiscal 2011 to
` 91,016.62 lakhs in the Fiscal 2012.
Fiscal 2011 Compared to Fiscal 2010
Our results of operations for Fiscal 2011 were primarily driven by the following key factors:
i) Increase in the number of screens to 543 as of March 31, 2011 from 508 as of March 31, 2010; and
ii) Commencement, in Fiscal 2011, of commercial operation of our subsidiary Reliance MediaWorks
Entertainment Services Limited, which is engaged in the business of film restoration and conversion. This
contributed to the improvement in our revenues from film production services during Fiscal 2011.
Additionally, during the year our subsidiaries Adlabs Heritage LLC and Adlabs Digital Media LLC were dissolved
and we acquired additional 49% stake in our subsidiary Big Cinemas Galaxy LLC, whereupon it became our wholly
owned subsidiary. Consequently, to this extent, the restated consolidated financial statements for Fiscal 2011 may
not be directly comparable with the financial statements for Fiscal 2010.
Income
Our total income increased by 13.73% to ` 85,026.20 lakhs for Fiscal 2011 from ` 74,763.90 lakhs for Fiscal 2010,
primarily as a result of increase in revenue from theatrical exhibition and film production services.
Income from Operations
Our income from our operations increased by 10.77% to ` 79,207.40 lakhs for Fiscal 2011 from ` 71,507.20 lakhs
for Fiscal 2010, primarily as a result of increase in revenue from theatrical exhibition and film production services,
which was partially offset by a decrease in income from television and film content production and distribution. The
following table provides details of our income from operations for Fiscals 2011 and 2010: (` in lakhs)
Particulars Fiscal 2011 Fiscal 2010
287
Amount % of Total
Income
Amount % of Total
Income
Theatrical exhibition business:
Sales of tickets 39,009.50 45.88% 34,706.70 46.42%
Entertainment Tax (5,098.90) (6.00%) (3,958.20) (5.29%)
Food and Beverage Sales 10,716.70 12.60% 8,722.30 11.67%
Advertisements 3,684.20 4.33% 4,651.70 6.22%
Others 3,066.40 3.61% 2,587.50 3.46%
Total Theatrical Exhibition Business Income 51,377.90 60.42% 46,710.00 62.48%
Film Production Services Business:
Processing and Printing of Film 18,794.00 22.10% 11,486.40 15.36%
Equipment and facilities rental income 2,084.60 2.45% 1,566.50 2.10%
Film Negatives Trading 1,926.30 2.27% 2,229.30 2.98%
Others 44.30 0.05% 72.30 0.10%
Total Film Production Services Business Income 22,849.20 26.87% 15,354.50 20.54%
Total Television and Film Content Production and
Distribution Income
4,980.30 5.86% 9,442.70 12.63%
Total Income from Operations 79,207.40 93.16% 71,507.20 95.64%
Income from Theatrical Exhibition Business
Our total income from our theatrical exhibition business increased by 9.99% to ` 51,377.90 lakhs for Fiscal 2011
from ` 46,710.00 lakhs for Fiscal 2010, primarily as a result of increase in the number of screens under operation
and the average realisations from theatres. The number of our properties increased to 146 as of March 31, 2011 from
140 as of March 31, 2010. Due to the increase in our properties, our screens under operation increased to 543
screens as of March 31, 2011 from 508 screens as of March 31, 2010. In addition to the increase in the number of
properties, we also derived realisations for full 12 months of Fiscal 2011 from 20 properties which had commenced
operations during Fiscal 2010.
Our sale of tickets collections income increased by 12.40% to ` 39,009.50 lakhs for Fiscal 2011 from ` 34,706.70
lakhs for Fiscal 2010, primarily as a result of increase in the number of screens under operation and average
realisation from theatres due to an increase in the number of multiplexes and an improvement in the business
environment.
Food and beverage sales income increased by 22.86% to ` 10,716.70 lakhs for Fiscal 2011 from ` 8,722.30 lakhs for
Fiscal 2010, primarily due to the launch of new food products and combinations of food and beverages made
available through a new menu at our cinema theatres.
Advertisement sponsorship income decreased by 20.80% to ` 3,684.20 lakhs for Fiscal 2011 from ` 4,651.70 lakhs
for Fiscal 2010, mainly due to the decrease in advertising expenditure incurred by our clients in view of adverse
business and economic conditions.
Income from our other theatrical exhibition business increased by 18.51% from to ` 3,066.40 lakhs in Fiscal 2011
from ` 2,587.50 lakhs in Fiscal 2010. Our other theatrical exhibition business mainly comprises of income from
parking and kiosk rentals. The increase in our income from other theatrical exhibition business was primarily on
account of increase in footfalls and the number of our screens under operation.
Income from Film Production Services Business
Our total income from our film production services business increased by 48.81% to ` 22,849.20 lakhs for Fiscal
2011 from ` 15,354.50 lakhs for Fiscal 2010, primarily as a result of growth in business related to digital
288
conversion, movie restoration and equipment renting. Additionally, our subsidiary, Reliance MediaWorks
Entertainment Services Limited commenced operations in Fiscal 2011 and generated an income of ` 4,293.37 lakhs.
Our income from processing and printing of films increased by 63.62% to ` 18,794.00 lakhs for Fiscal 2011 from `
11,486.40 lakhs for Fiscal 2010 due to an improvement in our analogue film processing. During Fiscal 2011 we
processed 372,484,000 feet of films as compared to 358,387,000 feet in Fiscal 2010. Consequently our income from
processing of films increased to ` 5,978.75 lakhs in Fiscal 2011 from ` 5,680.03 lakhs in Fiscal 2010.
Our income from equipment and facility rental increased by 33.07% to ` 2,084.60 lakhs for Fiscal 2011 from `
1,566.50 lakhs for Fiscal 2010, primarily as a result of completion of phase I of our new studio facility in January
2011 and consequent commencement of its renting.
Our income from film negatives trading decreased by 13.59% to ` 1,926.30 lakhs for Fiscal 2011 from ` 2,229.30
lakhs for Fiscal 2010, primarily as a result of decrease in the number of cans of negative sold from 18,41,000 cans in
Fiscal 2010 to 13,75,800 cans in Fiscal 2011.
Our other film services income decreased by 38.73% to ` 44.30 lakhs in Fiscal 2011 from ` 72.30 lakhs in Fiscal
2010.
Income from Television and Film Content Production and Distribution Business
Our total income from our television and film content production and distribution business decreased by 47.26% to
` 4,980.30 lakhs for Fiscal 2011 from ` 9,422.70 lakhs for Fiscal 2010, primarily as a result of reduction in the
number of movies distributed by us in Fiscal 2011.
Other Income
Our other income increased by 78.67% to ` 5,818.80 lakhs for Fiscal 2011 from ` 3,256.70 lakhs for Fiscal 2010,
primarily as a result of the profit realised on sale of fixed assets amounting to ` 2,694.80 lakhs, which were leased
back subsequently, and recovery of bad debts or provision written back amounting to ` 1,405.50 lakhs in Fiscal
2011.
Expenditure (` in lakhs)
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total
Income
Amount % of Total
Income
Direct Operational Expenses 31,059.80 36.53% 28,102.00 37.59%
Employee benefits expense 20,979.80 24.67% 13,179.30 17.63%
Other expenses 34,672.96 40.78% 25,317.05 33.86%
Finance costs (net) 17,514.20 20.60% 11,717.20 15.67%
Depreciation, amortisation and
impairment expense
13,226.50 15.56% 9,729.44 13.01%
Total Expenditure 117,453.26 138.14% 88,044.99 117.76%
Our expenditure increased by 33.40% to ` 117,453.26 lakhs for Fiscal 2011 from ` 88,044.99 lakhs for Fiscal 2010,
primarily as a result of increases in direct operational expenses, employee benefits expenses and administrative and
other expenses, and finance costs (net).
Direct Operational Expenses
The key components of our direct operational expenses are detailed in the following table: (` in lakhs)
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total Income Amount % of Total Income
289
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total Income Amount % of Total Income
Distributors‟ share 16,027.20 18.85% 15,782.50 21.11%
Print, publicity expenses and producers overflow 253.30 0.30% 333.80 0.45%
Cost of production for television content 3,185.20 3.75% 1,915.60 2.56%
Electricity, power and water charges 5,140.90 6.05% 4,173.90 5.58%
Cost of food and beverage sold 3,382.40 3.98% 2,618.30 3.50%
Cost of raw films sold 1,667.10 1.96% 2,007.00 2.68%
Processing charges 332.10 0.39% 509.00 0.68%
Other Direct Expenses 1,071.60 1.26% 761.90 1.02%
Total 31,059.80 36.53% 28,102.00 37.59%
Direct operational expenses increased by 10.53% to ` 31,059.80 lakhs for Fiscal 2011 from ` 28,102.00 lakhs for
Fiscal 2010. This increased primarily as a result of increases in Fiscal 2011 in (i) the cost of production for
television content caused by an increase in the content production and distribution undertaken by us during this
Fiscal, (ii) utilities charges due to increased cost of fuel and other inputs and an increase in the number of screens
operated by us, (iii) and an increase in cost of food and beverages sold resulting from the increase in the number of
screens operated by us customer footfalls.
Employee benefits expense
Our employee benefits expenses increased by 59.19% to ` 20,979.80 lakhs for Fiscal 2011 from ` 13,179.30 lakhs
for Fiscal 2010, primarily as a result of an increase in the number of employees to 6,644 as of March 31, 2011 as
compared to 5,634 as of March 31, 2010 due to the commencement of our production and post-production services
for television commercials, VFX services, studio located at the Film City, Mumbai, and digital conversion and
restoration services.
Other Expenses
Our administrative and other expenses increased by 36.96% to ` 34,672.96 lakhs for Fiscal 2011 from ` 25,317.05
lakhs for Fiscal 2010, primarily as a result of increases in costs due to rent and miscellaneous costs.
Finance Charges
Our finance costs (net) increased by 49.47% to ` 17,514.20 lakhs for Fiscal 2011 from ` 11,717.20 lakhs for Fiscal
2010, primarily as a result of utilisation of borrowed funds for capital expenditure. Additionally, during Fiscal 2011,
the interest rate on our borrowing increased, we incurred expenditure on the interest rate swap for hedging the
interest rates on our long term syndicated bank loan and we incurred foreign exchange loss due to redemption of
FCCBs.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense increased by 35.94% to ` 13,226.50 lakhs for Fiscal 2011 from
` 9,729.44 lakhs for Fiscal 2010, primarily as a result of increase in our assets due to the capital expenditure
incurred and full year utilisation of certain assets during Fiscal 2011.
Tax
Tax increased by 1,006.43% to ` 586.63 lakhs for Fiscal 2011 from ` 53.02 lakhs for Fiscal 2010, primarily as a
result of deferred tax, which increased to ` 452.69 lakhs for Fiscal 2011 as from ` 13.25 lakhs for Fiscal 2010.
Minority Interest
290
Share of the minority interest in our losses was ` 196.70 lakhs for Fiscal 2011 as compared to ` 530.87 lakhs for
Fiscal 2010.
(Loss)/Profit After Minority Interest After Adjustments Pursuant to Schemes
Loss after minority interest after adjustments increased to ` 32,816.99 lakhs for Fiscal 2011 from ` 12,803.24 lakhs
for Fiscal 2010, primarily as a result of increases in employee benefits expenses, administrative and other expenses,
finance costs (net) and depreciation, amortisation and impairment expense.
Fiscal 2010 Compared to Fiscal 2009
Our results of operations for Fiscal 2010 were primarily driven by the following key factors:
i) the expansion of our theatrical exhibition business;
ii) the acquisition of assets related to processing laboratory acquired by us from Vectrox Limited; and
iii) the expansion of our equipment rental business.
Additionally, during the year our subsidiaries BIG Cinemas Union LLC and Adlabs Forum LLC were dissolved, we
acquired 100% stake in Reliance MediaWorks Entertainment Services Limited, whereupon it became our wholly
owned subsidiary, we registered three new subsidiaries being Reliance Media Works VFX Inc., Adlabs Globalstar
LLC and Reliance Media and Marketing Communications LLC, we purchased the balance 10% of the outstanding
shares of Reliance Lowry Digital Imaging Services Inc., pursuant to which it became our wholly owned subsidiary
and we diluted our shareholding in BIG Cinemas Sahil LLC by 3%. Consequently, to this extent, the restated
consolidated financial statements for Fiscal 2010 may not be directly comparable with the financial statements for
Fiscal 2009.
Income
Our total income increased by 2.25% to ` 74,763.90 lakhs for Fiscal 2010 from ` 73,120.24 lakhs for Fiscal 2009,
primarily as a result of an increase in our total theatrical exhibition business income by 40.82% to ` 46,710.00 lakhs
for Fiscal 2010 from ` 33,171.14 lakhs for Fiscal 2009, an increase in film production services income by 17.60% to
` 15,354.50 lakhs for Fiscal 2010 from ` 13,057.00 lakhs for Fiscal 2009, which was partially offset by a decrease in
our total television and film content production and distribution income by 52.09% to ` 9,442.70 lakhs for Fiscal
2010 from ` 19,707.20 lakhs for Fiscal 2009.
Income from Operations
Our income from our operations increased by 8.45% to ` 71,507.20 lakhs for Fiscal 2010 from ` 65,935.34 lakhs for
Fiscal 2009, primarily as a result of increases in our total theatrical exhibition business income and film production
services income, which, was partially offset by a decrease in our total television and film content production and
distribution income. The following table provides details of our income from operations for Fiscals 2010 and 2009:
(` in lakhs)
Particulars Fiscal 2010 Fiscal 2009
Amount % of
Total
Income
Amount % of
Total
Income
Theatrical exhibition business:
Sale of tickets 34,706.70 46.42% 25,864.40 35.37%
Entertainment Tax (3,958.20) (5.29)% (2,288.70) (3.13)%
Food and Beverage Sales 8,722.30 11.67% 6,470.34 8.85%
Advertisements / Sponsorship 4,651.70 6.22% 1,465.20 2.00%
Others 2,587.50 3.46% 1,659.90 2.27%
Total Theatrical Exhibition Business Income 46,710.00 62.48% 33,171.14 45.37
291
Particulars Fiscal 2010 Fiscal 2009
Amount % of
Total
Income
Amount % of
Total
Income
Film Production Services Business:
Processing and Printing of Film 11,486.40 15.36% 9,299.80 12.72%
Equipment/ Facility Rental 1,566.50 2.10% 612.40 0.84%
Film Negatives Trading 2,229.30 2.98% 3,077.40 4.21%
Others 72.30 0.10% 67.40 0.09%
Total Film Production Services Business Income 15,354.50 20.54% 13,057.00 17.86%
Total Television and Film Content Production
and Distribution Income
9,442.70 12.63% 19,707.20 26.95%
Total Income from Operations 71,507.20 95.64% 65,935.34 90.17%
Income from Theatrical Exhibition Business
Our total income from our theatrical exhibition business increased by 40.82% to ` 46,710.00 lakhs for Fiscal 2010
from ` 33,171.14 lakhs for Fiscal 2009, primarily as a result of an increase in the scale of our operations in India and
the effect of accruing a full year of revenue for our theatrical exhibition business operations in Malaysia. Our
number of properties increased to 140 properties as of March 31, 2010 from 115 properties as of March 31, 2009.
Our number of screens increased to 508 screens as of March 31, 2010 from 429 screens as of March 31, 2009.
Our sale of tickets collections income increased by 34.19% to ` 34,706.70 lakhs for Fiscal 2010 from ` 25,864.40
lakhs for Fiscal 2009, primarily as a result of an increase in the number of our cinema theatres in India and the effect
of accruing a full year of revenue for our theatrical exhibition business operations in Malaysia.
Food and beverage sales income increased by 34.80% to ` 8,722.30 lakhs for Fiscal 2010 from ` 6,470.34 lakhs for
Fiscal 2009, primarily as a result of an increase in the number of our cinema theatres and an improved menu.
Advertisement sponsorship income increased by 217.48% to ` 4,651.70 lakhs for Fiscal 2010 from ` 1,465.20 lakhs
for Fiscal 2009, primarily as a result of increased monetisation of available space in the Indian and overseas markets
and the launch of several initiatives for co-branding and promotion of our products.
Income from Film Production Services Business
Our total income from our film production services business increased by 17.60% to ` 15,354.50 lakhs for Fiscal
2010 from ` 13,057.00 lakhs for Fiscal 2009, primarily as a result of our expansion into new business areas such as
equipment rental.
Our income from the processing and printing of film increased by 23.51% to ` 11,486.40 lakhs for Fiscal 2010 from
` 9,299.80 lakhs for Fiscal 2009, primarily as a result of the full year effect of the acquisition of our Subsidiary,
Lowry Digital.
Our income from equipment rental increased by 155.80% to ` 1,566.50 lakhs for Fiscal 2010 from ` 612.40 lakhs
for Fiscal 2009, primarily as a result of an increase in the number of cameras we rented and the rental of specialised
equipment.
Our income from film negatives trading decreased 27.56% to ` 2,229.30 lakhs for Fiscal 2010 from ` 3,077.40 lakhs
for Fiscal 2009, primarily as a result of reduction in sales volume.
Income from Television and Film Content Production and Distribution Business
292
Our total income from our television and film content production and distribution business decreased by 52.09% to
` 9,442.70 lakhs for Fiscal 2010 from ` 19,707.20 lakhs for Fiscal 2009, primarily as a result of the non-availability
of popular, large-budget content.
Other Income
Our other income decreased by 54.67% to ` 3,256.70 lakhs for Fiscal 2010 from ` 7,184.90 lakhs for Fiscal 2009,
primarily as a result of reduced income from, among other sources, dividends, the sale of long term investments and
consultation fees.
Expenditure
(` in lakhs)
Particulars Fiscal 2010 Fiscal 2009
Amount % of Total
Income
Amount % of Total
Income
Direct Operational Expenses 28,102.00 37.59% 23,868.30 32.64%
Employee benefits expense 13,179.30 17.63% 10,147.60 13.88%
Other Expenses 25,317.05 33.86% 20,056.90 27.43%
Finance costs (net) 11,717.20 15.67% 12,447.20 17.02%
Depreciation, amortisation and impairment
expense
9,729.44 13.01% 13,542.41 18.52%
Total Expenditure 88,044.99 117.76% 80,062.41 109.49%
Our expenditure increased by 9.97% to ` 88,044.99 lakhs for Fiscal 2010 from ` 80,062.41 lakhs for Fiscal 2009,
primarily as a result of increases in direct operational expenses, employee benefits expenses and administrative and
other expenses, partially offset by a decrease in depreciation, amortisation and impairment expense.
Direct Operational Expenses
The key components of our direct operational expenses are detailed in the following table:
Particulars Fiscal 2010 Fiscal 2009
Amount
(` in
lakhs)
% of Total
Income
Amount
(` in
lakhs)
% of Total
Income
Distributors‟ share 15,782.50 21.11% 8,758.10 11.98%
Print, publicity expenses and Producers
overflow
333.80 0.45% 2,029.20 2.78%
Cost of production for television content 1,915.60 2.56% 2,510.30 3.43%
Electricity, power and water charges 4,173.90 5.58% 3,640.50 4.98%
Cost of food and beverage sold 2,618.30 3.50% 2,020.70 2.76%
Cost of raw films sold 2,007.00 2.68% 3,008.70 4.11%
Processing charges 509.00 0.68% 1,331.40 1.82%
Other Direct Expenses 761.90 1.02% 569.40 0.78%
Total 28,102.00 37.59% 23,868.30 32.64%
Direct operational expenses increased by 17.74% to ` 28,102.00 lakhs for Fiscal 2010 from ` 23,868.30 lakhs for
Fiscal 2009, primarily as a result of an increase in amounts paid for distributors‟ share caused by the addition of new
cinema theatres.
Employee benefits expense
Our employee benefits expenses increased by 29.88% to ` 13,179.30 lakhs for Fiscal 2010 from ` 10,147.60 lakhs
for Fiscal 2009, primarily as a result of an increase in the number of employees to 5,634 as of March 31, 2010 as
293
compared to 2,382 as of March 31, 2009 to operate additional cinema theatres and the new businesses initiated by us
during this Fiscal.
Other Expenses
Our administrative and other expenses increased by 26.23% to ` 25,317.05 lakhs for Fiscal 2010 from ` 20,056.90
lakhs for Fiscal 2009, primarily as a result of increases in costs due to rent, legal and professional fees, facility
maintenance charges, labour charges, advertisement, repairs and miscellaneous costs.
Finance Charges
Our finance costs (net) decreased by 5.86% to ` 11,717.20 lakhs for Fiscal 2010 from ` 12,447.20 lakhs for Fiscal
2009, primarily as a result of lower expenditure on hedging of loans and interest and foreign exchange gain due to
redemption of FCCBs, which was partially offset by an increase in the utilisation of borrowed funds for capital
expenditure.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense decreased by 28.16% to ` 9,729.44 lakhs for Fiscal 2010 from `
13,542.21 lakhs for Fiscal 2009, primarily as a result of a reduction in our amortisation cost of films due to a
reduction in the number of films released during this Fiscal.
Tax
Tax decreased by 89.61% to ` 53.02 lakhs for Fiscal 2010 from ` 543.36 lakhs for Fiscal 2009, primarily as a result
of withdrawal of the fringe benefit tax during this Fiscal 2010 as compared to charge of ` 171.70 lakhs for Fiscal
2009, deferred tax (net) was ` 13.25 lakhs for Fiscal 2010 as compared to a credit of ` 69.44 lakhs for Fiscal 2009
and lower profit, in accordance with the IT Act, in Big Synergy Media Limited.
Minority Interest
Share of the minority interest in our losses was ` 530.87 lakhs for Fiscal 2010 as compared to ` 322.12 lakhs for
Fiscal 2009.
(Loss)/Profit After Minority Interest After Adjustments and Pursuant to Schemes
Loss after minority interest after adjustments increased to a loss of ` 12,803.24 lakhs for Fiscal 2010 from a loss of `
7,812.71 lakhs for Fiscal 2009, primarily as a result increased interest costs, including losses from derivative
contracts, depreciation, amortisation and impairment expense.
Liquidity and Capital Resources
We operate in a capital intensive industry. Our primary liquidity needs have been to finance our operations, working
capital needs, acquisitions and expansions, dividend payments and debt servicing. We have historically funded such
capital expenditures through a combination of internal cash flows and borrowings. The following table sets forth a
summary of our cash flows for the Fiscals 2012, 2011, 2010 and 2009:
(In ` lakhs)
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Net cash (used in) / generated from operating
activities (8,288.22) (5,276.62) 5,294.43 1,565.71
Net cash generated from /(used in) investing
activities (3,161.67) 746.68 (46,562.73) (23,791.91)
Net cash generated/(used in) financing activities 12,322.90 5,414.50 41,993.29 23,650.40
Net increase/(decrease) in cash and cash 873.01 884.56 724.99 1,424.20
294
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
equivalents
Cash in the form of bank deposits, current account balances and cash on hand represents our cash and cash
equivalents.
Net cash generated from Operating Activities
Net cash used in operations in the Fiscal 2012 was ` 8,288.22 lakhs primarily due to higher losses incurred by the
Company in the Fiscal 2012.
Net cash used in operations in Fiscal 2011 was ` 5,276.62 lakhs, primarily as a result of higher losses incurred
during Fiscal 2011.
In Fiscal 2010 we generated ` 5,294.43 lakhs as net cash from operating activities, primarily as a result of a smaller
increase in sundry debtors and greater finance costs (net), partially offset by a larger net loss before tax and an
increase in loans and advances.
Net cash used in operations in Fiscal 2009 was ` 1,565.71 lakhs primarily due to increase in sundry debtors, trade
payments and loss during the year.
Net cash generated from Investing Activities
Net cash used in investing activities was ` 3,161.67 lakhs in Fiscal 2012 primarily due to our investment in purchase
of fixed assets and advances given towards share application partially offset by sale of our investment in
subsidiaries.
Net cash generated from investing activities was ` 746.68 lakhs in Fiscal 2011. Key investments during Fiscal 2011
included, purchase of fixed assets of ` 22,335.80 lakhs and redemption of mutual fund units aggregating ` 7,983.98
lakhs.
Net cash used in investing activities was ` 46,562.73 lakhs in Fiscal 2010. Key investments during Fiscal 2010
comprised of purchase of fixed assets of ` 40,917.60 lakhs and investments in mutual fund units aggregating `
7,982.03 lakhs.
Net cash used in investing activities was `(23,791.91) lakhs in Fiscal 2009, which primarily consisted of the
purchase of fixed assets aggregating ` 35,911.00 lakhs and amounts paid for acquisition of companies which are,
presently, our subsidiaries aggregating ` 7,861.20 lakhs, partially offset by proceeds on the sale of long term
investments/rights therein of ` 3,127.30 lakhs and redemption of mutual fund units aggregating ` 13,556.69 lakhs .
Net cash generated from Financing Activities
Net cash from financing activities was ` 12,322.90 lakhs during Fiscal 2012 due to repayment of debts during the
period of ` 24,565.12 lakhs, which was offset by funds raised through issue of 10%, 29,50,000 Redeemable Non
Convertible Preference Shares of `5 each at a price of ` 1,000 aggregating ` 29,500 lakhs.
Net cash generated from financing activities in Fiscal 2011 was ` 5,414.50 lakhs. During Fiscal 2011, we raised `
39,775.90 lakhs from long term borrowings and repaid ` 17,083.30 lakhs and ` 1,003.80 lakhs towards short term
loans (net) and long term borrowings, respectively.
Net cash generated from financing activities was ` 41,993.29 lakhs in Fiscal 2010, which primarily consisted of
proceeds from short term borrowings (net) of ` 52,962.60 lakhs and proceeds from long term borrowings of `
5,489.00 lakhs, partially offset by interest expense and finance charges (net) of ` 13,414.80 lakhs.
295
Net cash generated from financing activities was ` 23,650.40 lakhs in Fiscal 2009, which primarily consisted of
proceeds from short term borrowings (net) of ` 31,271.20 lakhs and proceeds from long term borrowings of `
7,826.10 lakhs, partially offset by interest expense and finance charges (net) of ` 11,287.10 lakhs, and payment of
dividend of `1,574.90 lakhs.
Contingent Liabilities
For details in relation to our contingent liabilities, please see the chapter entitled “Financial Statements” on page F1.
Indebtedness
For details in relation to the Company‟s indebtedness, please see the chapter entitled “Financial Indebtedness” on
page 254.
Capital Commitments and Lease Obligations
For details in relation to our Capital Commitments and Lease Obligations, please see the chapter entitled “Financial
Statements” at page F1.
Off-Balance Sheet Arrangements
Derivative Instruments
There are no outstanding derivative contracts as of September 30, 2012
Capital Expenditure
Historical Capital Expenditure
The following table sets forth our historical capital expenditure by segment for the Fiscals 2012, 2011, 2010 and
2009:
(In ` lakhs)
Particulars Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Amount % of Total
Capital
Expenditure
Amount % of Total
Capital
Expenditure
Amount % of Total
Capital
Expenditure
Amount % of Total
Capital
Expenditure
Theatrical
Exhibition 2,488.60 39.19 5,860.10 26.16 18,905.70 43.87 36,854.70 88.05
Film
Production
Services 3,786.50 59.63 16,464.20 73.49 23,533.80 54.61 4,810.90 11.50
Television
and Film
Content
Production
and
Distribution 23.10 0.36 19.20
0.09
483.20 1.12 - -
Unallocated
51.90 0.82 58.70
0.26
168.60 0.40 186.30 0.45
Total
6,350.10 100.00 22,402.20
100.00
43,091.30 100.00 41,851.90 100.00
Related Party Transactions
296
For details of the related party transactions, please see the chapter entitled “Financial Statements - Statement of
Related Party Transactions” at page F1.
Quantitative and Qualitative Disclosure about Market Risk
Market risk is the risk of loss related to adverse changes in market prices, including interest rate and foreign
exchange rates of financial instruments. We are exposed to various types of market risks, in the normal course of our
business. The following discussion and analysis, which constitute “forward-looking statements” that involve risk
and uncertainties, summarise our exposure to different market risks.
1. Unusual or Infrequent Events or Transactions
Except as described in this Draft Letter of Offer, there have been no other events or transactions that, to the
knowledge of the management of our Company, may be described as “unusual” or “infrequent”.
2. Significant Economic Changes
Other than as mentioned under the part “Factors Affecting Results of Performance” in this chapter, to the
knowledge of the management of our Company, there are no other significant economic changes that
materially affect or are likely to affect income from continuing operations.
3. Known Trends or Uncertainties
Our business has been affected and we expect will continue to be affected by the trends identified above in
the part entitled “Factors Affecting our Results of Operations and Financial Condition” and the
uncertainties described in the chapter entitled “Risk Factors” at page 11. To our knowledge, except as
described or anticipated in this Draft Letter of Offer, there are no known factors which we expect will have
a material adverse impact on our revenues or income from continuing operations.
4. Future Relationship Between Costs and Income
Other than as described elsewhere in this Draft Letter of Offer, particularly in this chapter, to the
knowledge of the management of our Company, there are no known factors that might affect the future
relationship between costs and revenues.
5. Material Increases in Net Sales or Revenue due to Increased Sales Volume, Introduction of New
Products or Services, or Increased Sales Prices
Changes in revenues during the last three years are as explained in the part “Fiscal 2011 compared to Fiscal
2010” and “Fiscal 2010 compared to Fiscal 2009” in this chapter.
6. Total Turnover of Each Major Industry Segment in Which the Issuer Company Operated
We operate in the media and entertainment industry. We currently operate in three business segments;
namely theatrical exhibition, film production services facility and television / film production and
distribution. Relevant published data, as available, has been included in the chapter entitled „Industry
Overview‟ at page 152 of this Draft Letter of Offer.
7. Status of Any Publicly Announced New Products or Business Segment
Except as described in this chapter and the chapters entitled „Our Business‟ and „Risk Factors‟ at pages 165
and 11, respectively, of this Draft Letter of Offer, there are currently no publicly announced new products
or business segments.
8. Seasonality of Business
297
Our business is not seasonal. Our business is largely dependent on the state of economy and overall
economic conditions prevailing both locally and globally. The level of our operations, income and
profitability may be affected by these factors. For further details in this regard, please see the chapter
entitled „Risk Factors‟ at page 11 of this Draft Letter of Offer.
9. Supplier or Customer Concentration
Our business is not significantly dependent on any of our suppliers or customers.
10. Competitive Conditions
We have many competitors who are present in the exhibition, film processing, TV content production,
equipment rental, digital intermediate lab, digital cinema mastering and restoration business. In the future
we may also face competition from global entertainment companies who may establish operations in India.
Besides, our exhibition business is subject to varying degrees of competition in the geographic areas in
which we operate. These competitors may be national players, regional players or smaller independent
exhibitors. For further details in this regard, please see the chapter entitled „Risk Factors‟ at page 11 of this
Draft Letter of Offer.
298
STOCK MARKET DATA
The Equity Shares of our Company have been listed on the BSE and the NSE since January 8, 2001 and January 10,
2001, respectively. The tables below set forth, for the periods indicated the high, low and average closing prices and
the trading volumes on the BSE and the NSE for our Company‟s Equity Shares.
As on the date of this Draft Letter of Offer, 4,61,26,170 Equity Shares have been issued and are fully paid up.
The following tables set forth the reported high, low and average market prices of the Equity Shares of our
Company on the BSE and the NSE for the calendar years 2010, 2011 and 2012.
BSE
Calendar Year High (`) Date of High Volume on
date of
High
Low (`) Date of
Low Volume
on date of
Low
Average
Price (`)
2010 309.00 October 6,
2010
42,63,296 160.40 May 26,
2010
37,480 222.81
2011 236.20 January 3,
2011
6,78,081 66.10 December
20, 2011
49,806 125.39
2012 103.80 December 3,
2012
17,12,026 49.00 May 31,
2012
90,111 72.41
(Source: www.bseindia.com)
NSE
Calendar Year High (`) Date of High Volume on
date of
High
Low
(`) Date of
Low Volume
on date of
Low
Average
Price (`)
2010 309.00 October 6,
2010
1,46,82,789 161.65 May 27,
2010
2,94,145 222.92
2011 236.00 January 3,
2011
15,67,560 66.10 December
20, 2011
1,38,119 125.44
2012 103.75 December 3,
2012
40,59,242 49.00 June 4,
2012
1,26,079 72.44
(Source: www.nseindia.com)
Notes
High and Low for the period are based on intra day prices and Average Price is based on average of closing
price. In case of two days with the same closing price, the date with higher volume has been considered.
The following tables set forth the reported high, low and average market prices of the Equity Shares of our
Company on the BSE and the NSE during the last six months.
299
BSE
Month High (`) Date of
High
Volume on
date of
High
Low (`) Date of
Low
Volume
on date of
Low
Average Price (`)
September 2012 83.80 September
27, 2912
4,05,369 61.40 September
12, 2012
7,38,543 69.90
October 2012 86.65 October
01, 2012
6,08,110 63.45 October
18, 2012
1,05,410 76.08
November 2012 98.85 November
30, 2012
30,40,032 66.70 November
20, 2012
91,035 73.29
December 2012 103.80 December
03, 2012
17,12,026 75.50 December
24, 2012
22,153 82.76
January 2013 83.80 September
27, 2012
4,05,369 61.40 September
12, 2012
7,38,543 69.09
February 2013 86.65 October 1,
2012
6,08,110 63.45 October
18, 2012
1,05,410 76.51
(Source: www.bseindia.com)
NSE
Month High (`) Date of
High Volume on
date of
High
Low (`) Date of
Low Volume on
date of
Low
Average Price (`)
September 2012 84.2 September
27, 2012
8,59,565 61.15 September
12, 2012
14,94,812 69.13
October 2012 86.7 October 1,
2012
12,00,717 68.25 October
31, 2012
1,63,896 76.08
November 2012 98.9 November
30, 2012
59,57,204 66.65 November
20, 2012
2,25,988 73.39
December 2012 103.75 December
3, 2012
40,59,242 75 December
27, 2012
32729 82.73
January 2013 88 January 2,
2013
73668 70.6 January
25, 2013
28606 79.68
February 2013 74.95 February
4, 2013
25,797 59.1 February
28, 2013
54,028 67.64
300
(Source: www.nseindia.com)
Notes
High and Low for the period are based on intra day prices and Average Price is based on average of closing
price. In case of two days with the same closing price, the date with higher volume has been considered.
The closing prices of our Equity Shares on the BSE and the NSE on July 26, 2012, the trading day immediately
following the day on which the resolution of the Board to approve the Issue was passed, were `57.50 and `57.60 per
Equity Share, respectively.
301
MATERIAL DEVELOPMENTS
Recent Developments
The information required to be disclosed for the period between the last date of the financial statements provided to
the shareholders and the date preceding one month from the date of this Draft Letter of Offer is provided below:
1. Working results of our Company on a stand-alone basis for the period from October 1, 2012 to January
31, 2013:
Particulars Amount (In ` lakhs)
Total sales/ turnover 16,829.58
Other operating income 246.47
Total income 17,076.05
EBITDA (1,719.64)
Interest/ finance charges (net) 9,030.19
Provision for depreciation 2,615.71
Provision for tax -
Profit after tax (13,119.07)
2. Material changes and commitments, if any, affecting the financial position of our Company:
There are no material changes and commitments, other than as disclosed in this Draft Letter of Offer, which
are likely to affect the financial position of our Company since September 30, 2012 (i.e. last date up to
which audited information is incorporated in this Draft Letter of Offer).
3. Reliance Group executed an MoU with the Wanda Group, China, to set up a joint venture for strategic long
term relationship between the two groups. Pursaunt to this MoU, we have agreed to explore possible co-
operation in the multiplexes business in India and the US.
4. Our Company has filed unaudited financial results for the three months ended December 31, 2012 with the
Stock Exchanges in accordance with the requirements under the Listing Agreement:
302
Limited Review Financials
Part - I
Statement of Standalone Unaudited Financial Results for the Quarter ended December 31, 2012
(` in lakhs except per share data)
Sr.
No. Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
1 Income from Operations
a) Net sales / income from operations 13,167.82 13,775.92 12,563.15 73,704.49
b) Other operational income 423.60 399.50 342.86 2,282.97
Total income from operation 13,591.42 14,175.42 12,906.01 75,987.46
2 Expenses
a) Cost of material consumed 74.17 89.18 93.79 770.01
b) Purchase of stock-in-trade 765.49 701.33 814.51 5,127.80
c) Change in inventories (32.38) 125.94 52.59 66.03
303
Part - I
Statement of Standalone Unaudited Financial Results for the Quarter ended December 31, 2012
(` in lakhs except per share data)
Sr.
No. Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
d) Employee benefit expense 1,830.51 1,605.77 2,612.82 13,856.08
e) Distributors' share 3,249.12 3,370.82 2,830.48 16,793.94
f) Other direct operational expenses 1,591.08 1,314.67 1,145.62 7,306.34
g) Depreciation and amortisation 2,008.16 1,837.63 1,751.00 10,789.38
h) Rent 3,757.06 3,539.42 3,961.54 23,708.63
i) Other expenses 3,325.29 5,646.31 5,298.71 26,104.53
Total expenses 16,568.50 18,231.07 18,561.06 104,522.74
3 (Loss) from operations before other income,
finance costs and exceptional items (2,977.08) (4,055.65) (5,655.05) (28,535.28)
4 Other income 707.62 (663.87) 1,660.47 4,467.35
304
Part - I
Statement of Standalone Unaudited Financial Results for the Quarter ended December 31, 2012
(` in lakhs except per share data)
Sr.
No. Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
5 (Loss) from ordinary activities before finance
costs and exceptional items (2,269.46) (4,719.52) (3,994.58) (24,067.93)
6 Finance costs (net) 6,651.24 5,893.39 7,519.00 39,061.11
7 (Loss) from ordinary activities after finance
costs but before exceptional items (8,920.70) (10,612.91) (11,513.58) (63,129.04)
8 Exceptional items - 7,227.17 - 7,227.17
9 (Loss) from ordinary activities before tax (8,920.70) (17,840.08) (11,513.58) (70,356.21)
10 Tax expense - -
-
305
Part - I
Statement of Standalone Unaudited Financial Results for the Quarter ended December 31, 2012
(` in lakhs except per share data)
Sr.
No. Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
11 Net (loss) from ordinary activities after tax (8,920.70) (17,840.08) (11,513.58) (70,356.21)
12 Extraordinary items (net of tax expenses) - - - -
13 Net (loss) for the period (8,920.70) (17,840.08) (11,513.58) (70,356.21)
14 Paid-up equity share capital (face value ` 5/-
per share) 2,306.31 2,306.31 2,306.31 2,306.31
15 Reserves excluding revaluation reserves
(22,686.22)
306
Part - I
Statement of Standalone Unaudited Financial Results for the Quarter ended December 31, 2012
(` in lakhs except per share data)
Sr.
No. Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
16
Earning per share for the period before extra-
ordinary items (in `)
Basic (19.34) (38.68) (24.96) (152.53)
Diluted (19.34) (38.68) (24.96) (152.53)
17
Earning per share for the period after extra-
ordinary items (in `)
Basic (19.34) (38.68) (24.96) (152.53)
Diluted (19.34) (38.68) (24.96) (152.53)
* The figures for the quarter ended September 30, 2012 are balancing figures between the audited figures in respect of the full
financial year and the published year to date figures up to the to the end of the fifth quarter i.e. June 30, 2012 of the
previous financial year, which was subjected to limited review by the Statutory Auditors.
307
Statement of Standalone Unaudited Segment Reporting for the quarter ended December 31, 2012
(` in lakhs)
Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
Segment Revenue / Other Income
Film production services** 1,968.78 2,385.64 3,021.76 16,652.57
Theatrical exhibition 11,370.05 11,726.21 9,910.78 59,170.23
Film production and distribution 276.58 72.73 15.31 370.70
13,615.41 14,184.58 12,947.85 76,193.50
Less: Inter segment revenue 23.99 9.16 41.84 206.04
Net sales / income from
operations 13,591.42 14,175.42 12,906.01 75,987.46
Add: Others (unallocated) 707.62 (663.87) 1,660.47 4,467.35
Total income 14,299.04 13,511.55 14,566.48 80,454.81
Segment results ( profit / ( loss )
308
before interest and tax )
Film production services** (1,026.38) (329.57) 310.50 (143.90)
Theatrical exhibition (1,772.31) (2,105.10) (4,499.08) (19,297.76)
Film production and distribution 70.24 10.60 7.98 75.28
Total segment results (2,728.45) (2,424.07) (4,180.60) (19,366.38)
Less: Finance costs (net) 6,651.24 5,893.39 7,519.00 39,061.11
Less: Other unallocable expenses net
off unallocable income (458.99) 9,522.62 (186.02) 11,928.72
Total loss before tax
(8,920.70) (17,840.08) (11,513.58) (70,356.21)
Capital employed ( segment assets
less segment liabilities )
Film production services** 39,785.97 40,548.52 42,940.42 40,548.52
Theatrical exhibition 52,116.61 52,466.82 58,939.06 52,466.82
Film production and distribution 7,488.51 7,212.42 8,612.82 7,212.42
Unallocated (127,339.63) (120,460.17) (118,657.29) (120,460.17)
Total (27,948.54) (20,232.41) (8,164.99) (20,232.41)
309
* The figures for the quarter ended September 30, 2012 are balancing figures between the audited figures in
respect of the full financial year and the published year to date figures up to the to the end of the fifth quarter
i.e. June 30, 2012 of the previous financial year, which was subjected to limited review by the Statutory
Auditors.
** Pursuant to the business restructuring exercise of Film production services, w.e.f October 1, 2011, animation
business is no longer considered to be a part of this segment.
Part - II
Information for the Quarter ended December 31, 2012
(` in lakhs)
Sr.
No. Particulars
Quarter
(Unaudited)
Quarter
(Audited)
Quarter
(Unaudited)
Year
(Audited)
01.10.12 to
31.12.12
01.07.12 to
30.09.12 *
01.10.11 to
31.12.11
01.04.11 to
30.09.12
A Particulars of Shareholding
1 Public shareholding
- Number of shares 16,996,804 16,996,804 16,996,804 16,996,804
- Percentage of shareholding 36.85 36.85 36.85 36.85
310
2
Promoters and promoter group
Shareholding
a) Pledged / encumbered
- Number of shares Nil Nil Nil Nil
- Percentage of shares (as a % of the
total shareholding of promoter and
promoter group) NA NA NA NA
- Percentage of shares (as a % of the
total share capital of the company) NA NA NA NA
b) Non-encumbered
- Number of shares 29,129,366 29,129,366 29,129,366 29,129,366
- Percentage of shares (as a % of the
total shareholding of promoter and
promoter group) 100.00 100.00 100.00 100.00
- Percentage of shares (as a % of the
total share capital of the company) 63.15 63.15 63.15 63.15
* The figures for the quarter ended September 30, 2012 are balancing figures between the audited figures in respect
of the full financial year and the published year to date figures upto the to the end of the fifth quarter i.e. June 30,
2012 of the previous financial year.
Particulars Quarter ended December 31, 2012
311
B Investor Complaints
Pending at the beginning of the quarter
-
Received during the quarter
2
Disposed of during the quarter
2
Remaining unresolved at the end of the
quarter -
1. The financial results of the Company for the Quarter ended December 31, 2012 have been subject to limited review by
the Statutory Auditors of the Company and reviewed by the Audit Committee and approved by the Board of Directors
at their meeting held on February 9, 2013. The above results pertain to the Company as a standalone entity.
2. The Company has opted to publish consolidated financial results from the quarter ended June 30, 2008.
3. Considering the continuing substantial losses incurred by the Company, its net worth has eroded. However, having
regard to revenue visibility of new businesses in films and media services, improved operational performance of
Exhibition business, financial support from its promoters, further restructuring exercise being implemented etc, the
financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are
required to the carrying value of assets and liabilities. The Auditors of the Company had put matter of emphasis on the
aforesaid matter in the limited review report for the quarter ended December 31, 2012 and the same remarks are there
in the Auditors Report for the eighteen month period ended September 30, 2012.
During the previous year, the Company executed an indicative non-binding term sheet with a private equity fund to
acquire a substantial minority stake through an investment of ` 60,500 lakhs in our Company‟s film and media services
division. The investment is proposed to be made into the subsidiary of our Company, into which our film and media
services division will be transferred. No definitive agreement has been executed in respect of the proposed transaction.
Though exclusivity period as per non-binding term sheet has been expired on October 15, 2012, the Company and the
fund are in process of extending exclusivity period.
The Company had taken appropriate steps for the purpose of raising long term funds.
4. The previous financial year of the Company was extended till September 30, 2012.
5. Figures for the previous quarter / periods have been regrouped / rearranged to confirm to current quarter‟s presentation.
312
SECTION VI: LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
Except as stated below there are no outstanding litigation, suits, criminal or civil prosecutions,
proceedings or tax liabilities against our Company, its Subsidiaries, its Joint Ventures, associates, its
Promoters, Directors and the Group Companies and there are no defaults, non-payment of statutory dues,
over-dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues
payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issued by
our Company, defaults in creation of full security as per terms of issue/other liabilities, proceedings
initiated for economic/civil/any other offences (including past cases where penalties may or may not have
been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule
XIII of the Companies Act) other than unclaimed liabilities of our Company and no disciplinary action has
been taken by SEBI or any stock exchanges against our Company, its Subsidiaries, its Joint Ventures, its
associate, its Promoters, Directors or our Group Companies.
The litigation with respect to our Group Companies has been disclosed as of January 31, 2013.
For details of the contingent liabilities of our Company, see the section entitled “Financial Statements” at
page F1.
Cases involving our Company
Cases filed against our Company
Criminal Cases
Kishor. K. Dave, managing trustee representing Shree Jagrut Nagrik, consumer protection organization
registered under Public Charity Trust Act, 1950 and Society Registration Act, 1860, has filed a letter with
the Collector of Deesa. The Collector in turn intimated the local police who took cognizance of the offence
and filed a criminal complaint before the Additional Sessions Judge at Deesa, Palanpur, against three
employees of our Company at Rajmandir BIG Cinemas Deesa Theatre in their official capacity alleging,
inter alia, that food items were being sold in the above-mentioned theatre at a high price and for non-
adherence to rules and regulations under the Standard and Weights Measures Act, 1976 and the rules made
there under. Bail has been granted to the three employees and the matter is currently pending.
Civil Cases
1. IndusInd Media & Communications Limited (“Plaintiff”) has filed a summary suit (no. 1666 of 2006)
before the High Court of Judicature at Bombay against Amit Bokadia, K.C. Bokadia and our Company
for recovery of money due and payable by Amit Bokadia and K.C. Bokadia to the Plaintiff in relation
to two films titled “Ek Haseena Ek Deewana” and “Sazaa”. Our Company was a party to the suit as
our Company is in possession of the negatives of the above-mentioned films. Our Company has in the
reply, inter alia, stated that since our Company was entrusted with the task of converting the negatives
of the film into positives for public exhibition, our Company had the first lien and primary charge over
the film negatives until the amount of `123.90 lakhs due and payable is paid to our Company. The
matter is currently pending.
2. One Mahendra Dhariwal had obtained advances in the form of loans from Samdarshi Jaiswal
(“Plaintiff”) for making three films i.e. “Maa Tujhe Salaam”, “Nehle Pe Dehla” and “Jail”.
Samdarshi Jaiswal has filed a summary suit (no. 285 of 2007) before the Court of Civil Judge (Senior
Division), Chandigarh, against amongst others Mahendra Dhariwal and our Company alleging non-
payment of an amount due and payable by Mahendra Dhariwal and breach of undertaking by our
Company by handing over the prints of the movie “Nehle Pe Dehla” to Mahendra Dhariwal while the
313
loan amount was outstanding. The Plaintiff has also claimed a sum of `300.00 lakhs. The matter is
currently pending.
3. Samdarshi Jaiswal (“Applicant”) has filed a civil contempt application (no. 144 of 2008) before the
Civil Judge (Junior Division), Chandigarh against our Company alleging violation of interim order
dated February 21, 2007 in summary suit (no. 285 of 2007) discussed in 2 above which restrained the
release of the prints of the movie. The matter is currently pending.
4. There are 23 matters pending against our Company, and others, before various courts and fora
including Collector of Stamps, in relation to, inter alia, infringement of intellectual property rights,
recovery of amounts due and payable, ticket pricing, restraining orders against the release of films.
The aggregate amount involved in these cases is `181.52 lakhs. The matters are currently pending.
5. A Writ Petition no. 7789 of 2012 has been filed before the High Court of Judicature at Bombay by the
Maharashtra State Electricity Distribution Company Limited for setting aside an order dated March
26, 2012 passed by the Consumer Grievance Redressal Forum, MSEDC Bhandup in favour of our
Company wherein the utility was directed to revert the status of our Company to an Industrial unit and
accordingly be charged with Industrial tariff as against commercial tariff which we have paid thus far.
The matter is currently pending.
6. Our Company had filed a complaint before the Competition Commission of India, New Delhi, against
Karnataka Film Chamber and Commerce (“KFCC”) seeking a direction from the forum restraining
KFCC for pressurizing all the local distributors and producers in the State of Karnataka not to supply
any language film prints to Big Cinema outlets. An interim order date September 9, 2010 has been
passed, which was further extended by an order dated September 21, 2010, restraining KFCC from
directly or indirectly imposing restriction on the distributors or producers to supply the film prints to
Big Cinema Theatres. A Final Order dated February 16, 2012 was passed against the KFCC. Against
this Order, an appeal was preferred by KFCC before the Competition Appellate Tribunal and by an
order dated August 8, 2012 the interim reliefs prayed for by KFCC has been rejected by Competition
Appellate Tribunal. Against this Order of rejection, KFCC preferred a Writ Petition in the Karnataka
High Court and the same is currently pending and there is no monetary claim against our Company.
Arbitration Proceedings
1. Pursuant to a memorandum of understanding dated February 1, 2008 between Nishant Constructions
Private Limited, the developer of Regency Centre at Prahladnagar, Ahmedabad and our Company, the
developer has initiated arbitration proceedings against our Company in December 2011. The
developer has claimed that it was ready to handover the possession of the multiplex shell and our
Company reneged from its obligations under the memorandum of association and terminated the
memorandum of association. The aggregate amount involved in this case is `6,006.93 lakhs. The
matter is pending.
2. G.S.G. Builders and Infrastructure Limited, the developer of Gold Spot Mall, Hyderabad has initiated
arbitration proceedings against our Company in January 2012. The developer has alleged that our
Company has on various occasions defaulted in the payment of charges payable under a lease deed
dated July 27, 2004 between the developer and our Company and has sought to terminate the lease
deed. Our Company has opposed the termination on various grounds and the matter is pending. The
aggregate amount involved in the matter is `1853.04.
Tax Cases
1. A show cause notice dated August 30, 1999 (“Show Cause Notice”) was issued by the Office of the
Commissioner of Central Excise, Mumbai, alleging that a chemical preparation employed for use in
the processing of cinematograph films in our Company‟s laboratories amounted to a „manufacturing
activity‟ and hence attracts appropriate tariffs. It was further alleged that the waste generated from the
314
chemical preparations during such processing activity known as „Hypo Solution Waste‟ fell within the
category of “Ash and residues – other than from the manufacture of iron and steel, containing metal or
metal compounds” and was chargeable to excise duty. The Commissioner of Central Excise pursuant
to his order dated June 26, 2000 confirmed the demands mentioned in the Show Cause Notice and
levied penalties on our Company and Vasanji Mamania, our director then. Several other periodical
notices were issued by the Commissioner of Central Excise, Mumbai and the demand made pursuant
to these show cause notices were confirmed by their respective adjudicating officers. An appeal was
preferred to the Customs Excise and Service Tax Appellate Tribunal (“CESTAT”) by our Company
challenging the orders of the above-mentioned adjudicating officers. The CESTAT by its order dated
July 11, 2008 remanded the matter back to the adjudicating authority for a fresh hearing. The
Commissioner of Central Excise preferred an appeal to the High Court of Judicature at Bombay
challenging the order dated of July 11, 2008. The High Court, by its order dated June 24, 2009,
directed all parties to appear before the Commissioner of Central Excise and with this the appeal was
disposed off. The adjudicating officer upon hearing the parties further confirmed the demand made by
all the show cause notice by his order dated August 27, 2009. Hence our Company has preferred an
appeal to the CESTAT challenging the order dated August 27, 2009. Thereafter, the Joint
Commissioner of Central Excise, Mumbai issued another show cause notice which was further
confirmed by the Joint Commissioner of Central Excise, Mumbai by his order dated July 15, 2010. A
writ petition was filed before the High Court of Judicature at Bombay against the order dated July 15,
2010. Show cause notices were issued from time to time and multiple proceedings in the matter are
currently pending. An Order dated August 16, 2012 was passed against the Company by the
Commissioner of Central Excise Mumbai-V. In an appeal preferred by the Company against this order
before the CESTAT by an order dated November 5, 2012, the CESTAT stayed the said proceedings. A
Show Cause Notice dated September 3, 2012 was issued by Commissioner of Central Excise,
Mumbai-V seeking the Company to show cause why a penalty and interest should not be charged on
the Company for non inclusion of duty of `120.00 lakhs. Personal hearing was held on January 7,
2013. We filed our reply to show cause notice on the said date. By an Order dated January 29, 2013
Commissioner of Central Excise Mumbai-V confirmed the penalty of `120.00 lakhs. CESTAT by an
order dated February 4, 2013 passed an unconditional stay on this show cause notice and directed
Assistant Commissioner CE –V not to take any recovery action till final disposal of Appeal and Stay
Application. The overall amount involved in these matters is `2,555.94 lakhs.
2. Pursuant to order dated January 22, 2013 by the Indore Bench of the Jabalpur High Court, our
Company has been asked to file a fresh application against the claim of Assistant Commissioner,
Commercial Tax, Indore of Entertainment Tax from the Company in respect of its property, Mangal
Cinema, Indore. The Company has filed its written submissions before the Asst. Commissioner and
the matter is currently pending. Since the previous demand notice has been set aside, the amount of
Entertainment Tax involved cannot be ascertained at this stage. However under the previous demand
notice (subsequently set aside) a sum of approx. `489.00 lakhs was demanded from the Company.
3. 2 (Two) matters, Order no. 102/BR-102/ST II/Yh-I/2012 and Order no. 60/ST II/WLH/2012 dated
March 29, 2012 and May 28, 2012, respectively, involving our Company are pending before the
CESTAT against orders of the Commissioner of Service Tax in relation to service tax liabilities on
various transactions. The aggregate amount involved in this matter is `272.63 lakhs.
4. 8 (Eight) matters involving our Company are pending before various state authorities in relation to
value added tax liabilities. The aggregate amount involved in these matters is `44.63 lakhs.
5. Our Company has received 13 demand notices from the TDS department for financial year 2006-2007
to financial year 2009-2010 with respect to short deduction of TDS, tax deducted but not paid and
interest for delayed payment of TDS. The amount involved in these matters is `1,017.10 lakhs. Our
company has preferred appeals and applications for rectification of mistakes apparent with respect to
some of these notices. No replies have been received in this regard.
315
6. There is 1 (one) dispute pending with regard to Rave Entertainment Private Limited, a wholly owned
subsidiary of our Company which merged with our Company with effect from April 1, 2008. The IT
Department issued a notice of demand for `1,387.31 lakhs on November 20, 2010 with respect to
addition of `3,344 lakhs undisclosed income in the assessment for the assessment year 2008- 2009. An
appeal was preferred to the CIT (Appeal). The CIT (Appeal) by order dated November 30, 2011
deleted the addition and allowed the appeal. The IT department preferred an appeal to the Income Tax
Tribunal against the order passed by the CIT (Appeal) and the matter is pending.
7. The owners of certain multiplexes that we manage in Gurajat, in their capacity as license holders,
initiated proceedings before the High Court of Judicature at Gujarat against the Entertainment tax
authorities for availing exemption from payment of tax under the applicable law. The High Court
decided the matter against the owners who preferred an appeal to the Supreme Court of India. In
accordance with directions of the Supreme Court, our Company has deposited the amount payable for
the disputed period with the concerned authority since our Company is responsible for collection of
entertainment tax. The amount involved in this matter is `509.57 lakhs. The matter is currently
pending. In respect of two multiplex properties of our Company at Gold Big Cinemas, Kalyani Nagar,
Pune and Chinchwad, Pune, the Additional Collector at Pune has issued notices dated September 15,
2012 claiming amount of `7,32.85 lakhs + `0.02 lakhs and `64.71 lakhs + `0.02 lakhs respectively,
towards penalty for the two properties respectively. The claim of the Addl. Collector is based on the
point that during the 100% ET exemption period, the ET amount was collected from the Patrons by
our Company but not deposited with the ET authorities. The claim is for period prior to 2008. The
final hearing was held on November 19, 2012. The Company is yet to receive any order from the
office of the Additional Collector, Pune.
Labour Cases
6 (six) matters involving our Company are pending, among others, before various courts and forums such
as Labour Court, City Civil Court, Office of the Collector (Labour) in relation to, inter alia, payment of
minimum wages, illegal termination and retrenchment. The aggregate amount involved in these matters is
`14.53 lakhs.
Consumer Cases
1. 7 (Seven) matters involving our Company are pending before Jaipur District Consumer Forum in
relation to cancellation of movie shows. The aggregate amount involved in these cases is `3.90 lakhs.
2. 15 (fifteen) matters involving our Company are pending before Khandwa District Consumer Forum in
relation to non payment of Provident Fund to the Complainants, The aggregate amount involved in
these cases is `12.05 lakhs .
Cases filed by our Company
Criminal Complaints
Our Company had engaged the services of a contractor, Laurent & Benton Management Consultants
Limited (“Contractor”), for engaging the services of and deploying the personnel of the contractor at its
various exhibition properties. Pursuant to an agreement with the Contractor, our Company paid to the
Contractor a sum of `294.20 lakhs towards its Provident Fund contribution payable to the personnel
deployed at the properties of our Company. Our Company, on learning that the amount as aforesaid which
was supposed to be deposited in the individual accounts of the personnel by the Contractor had actually
been misappropriated by the Contractor, lodged an FIR with the police authorities in New Delhi and filed
a criminal complaint in the Court of Metropolitan Magistrate, Patiala House, New Delhi. The Metropolitan
Magistrate has by an order dated June 30, 2012 directed the Station House Officer, Barakhamba and the
Deputy Commissioner of Police (EOW) to look into the matter and submit their reports. The matter is
currently pending.
316
Criminal Cases
Our Company has filed 3 (three) separate complaints before various Metropolitan Magistrates and
Sessions Courts in relation to misappropriation of funds, cheating and misrepresentation of facts, violation
of Private Security Guards (Regulation of Employment and Welfare) Scheme, 2002 and Maharashtra
Private Security Guards (Regulation of Employment and Welfare) Act, 1981. The matters are currently
pending.
Civil Cases
1. Our Company has filed 4 (four) separate suits before the High Court of Judicature at Bombay for
recovery of dues. The aggregate amount involved in these cases is `603.98 lakhs. The matters are
currently pending.
2. Our Company has filed a suit 2537 of 2010 before the High Court of Judicature at Bombay against
Headstart Films Private Limited and four others for recovery of dues amounting to `857.64 lakhs
towards assistance given for the film “London Dreams”. A notice of motion seeking interim reliefs
was moved by our Company and the same was rejected by the High Court of Judicature at Bombay
pursuant to its order dated September 21, 2010. The matter is currently pending.
3. Our Company has filed a writ petition 13305 of 2011 before the High Court of Judicature at
Hyderabad against the Lokayukta, the Government of Andhra Pradesh, Commissioner of Police, G. L.
Narasimha Rao and others challenging order dated April 1, 2011 passed by the Lokayukta,
Government of Andhra Pradesh and seeking directions from the Court quash
ing the proceeding
initiated pursuant to a complaint filed by G. L. Narasimha Rao before the Court of the IX Additional
Chief Metropolitan Magistrate, Nampally alleging that online sale of movie tickets through online
agencies by various theatres and multiplexes including our Company is unlawful. By an order dated
July 20, 2011 the High Court of Judicature at Hyderabad has granted interim directions restraining the
respondents from interfering with the sale of tickets through on-line ticket bookings by our Company.
The matter is currently pending.
4. A Section 9 Application (under the provisions of the Arbitration and Conciliation Act, 1996) Arb O. P.
No. 24 of 2013 for interim reliefs has been filed before the City Civil Court at Hyderabad and a
Section 11 Arbitration Application no. 3 of 2013 has been filed before the Hon‟ble High Court of
Andhra Pradesh against Gayatri Hotels & Theatres Pvt. Ltd. in respect of Maheshwari Parmeshwari
Multiplex for recovery of our dues amounting to `630 lakhs. The matters are currently pending.
5. A Section 9 Application (under the provisions of the Arbitration and Conciliation Act, 1996) Arb O. P.
No. 272(L) of 2013 for interim reliefs has been filed before the High Court of Judicature at Bombay
against Escape Artists Motion Pictures. The matter pertains to recovery of amounts advanced to the
Respondents for the production of a film “Chennaiyil Oru Mazhaikaalam”, which has not yet been
completed. On March 4, 2013 a stay has been granted on the release of another film “Keda Billa
Killadi Ranga” proposed to be released by the Respondents under their group/affiliates banner. The
amount involved in the matter is approximately `116.15 lakhs. The matter is currently pending.
Arbitration proceedings
1. Our Company has initiated 3 (three) separate arbitration proceedings in relation to termination of
conducting agreements, entered into between our Company with owners of properties at Indore (Big B
and Satyam) and Guna (Jyoti and Sriram Smriti) on grounds such as failure to obtain requisite
approvals, structural deficiencies of the theatre, etc. The aggregate amount claimed by our Company is
`1,525.08 lakhs.
317
2. Our Company has initiated an arbitration proceeding against B. R. Films in relation to termination of
an agreement dated March 14, 2008 pertaining to a film titled “Banda Yeh Bindaas Hai”. Pursuant to
this agreement our Company had paid an amount of `925.00 lakhs for distribution, exploitation,
exhibition and marketing of the above-mentioned film. B. R. Films had agreed to hand over the film to
our Company on its completion. It is the claim of our Company that the B. R. Films failed to comply
with its obligation. The amount involved in the matter is approximately `1,321.50 lakhs. The matter is
currently pending.
Section 138 of the Negotiable Instruments Act, 1881
10 (ten) cases have been filed by our Company against its customers under Sections 138 and 142 of
Negotiable Instruments Act, 1881 for recovery of dues and dishonour of cheques. The aggregate amount
involved in these cases is approximately `294.59 lakhs. These matters are pending.
Notices
Our Company has served a notice dated April 14, 2009 to Jagdish Vasudev Agarwal, proprietor of
Rajmandir Cinema, Jalna for termination of the conducting agreement entered into between the parties on
July 31, 2007. Pursuant to this agreement it was agreed between the parties that the premises of Rajmandir
Cinema would be handed over to our Company on or before September 1, 2007 with all the necessary
licenses, permissions, certifications and requirements for the purposes of refurbishing and operating the
same. Our Company has stated in its statement that Jagdish Vasudev Agarwal failed to carry out his
obligations. The title of the property was disputed by Marathwada Wakf Board. Our Company has claimed
an amount of `42.50 lakhs from Jagdish Vasudev Agarwal.
Miscellaneous Matters
Our Company has filed 2 (two) separate complaints before the Joint Assessor & Collector, Mumbai
Municipal Corporation and the Brihan Mumbai Municipal Corporation. Our Company has sought
adoption of the profit basis method for assessment of its property at IMAX Big Cinemas, Wadala and Big
Cinemas R Mulund, respectively, rather than the currently followed gross method. Both the complaints are
currently pending.
Small Scale Industries
Except as disclosed below, our Company does not owe any small scale industries any amounts exceeding
` 1.00 lakh which is outstanding for more than 30 days except for those small scale sector industry entities
where the payment terms are in excess of 30 days. There are no disputes with such entities in relation to
payments to be made to them.
(in `)
Sr. No. Name Amount
outstanding as
on January 31,
2013
Amount outstanding
more than 30 days as on
January 31, 2013
1. Dhananjay Industrial Engineering Private
Limited 1.35 1.35
2. Linear Electronics Private Limited 1.06 1.06
3. R & S (I) Electronics Private Limited 5.97 5.97
4. Gemini Picture Palace 4.71 4.71
5. Insight Business Machines Private Limited 1.07 1.07
6. Ellora Mega Buildings Projects 13.83 13.83
7. Blue Star 1.15 1.15
8. KMG ATOZ Sytems Private Limited 1.44 1.44
9. Royal Uniform Tailors 1.17 1.17
10. Venus Furniture Private Limited 14.85 14.85
318
Cases involving our Subsidiaries, Joint Ventures, associate and Partnership
Subsidiaries
1. Big Synergy Media Limited
Cases filed by Big Synergy Media Limited
Criminal Cases
Big Synergy Media Limited has filed a criminal complaint dated Junaury 05, 2011with the police station
located at Amboli, Maharashtra against Prashant Jhadav alleging criminal breach of trust. Monies were
advanced to Prashant Jhadav in various tranches for the production and delivery of a TV series. The
program did not materialise and the monies were repayable to Big Synergy Media Limited. Prashant
Jhadav was acting as Creative Producer through Shree Om Comtech Private Limited. The company claims
that Prashant Jhadav has misappropriated the money advanced to him by Big Synergy Media Limited.
This matter has been transferred to the police station located at Veera Desai. The amount involved in the
matter is `79.20 lakhs and till date, an amount of `44.00 lakhs has been recovered from him. The matter is
currently pending.
Section 138 of the Negotiable Instruments Act, 1881
Big Synergy Media Limited has filed a cheque dishonour case in Andheri Metropolitan Magistrate Court
in December 2011 having case no. 2921 of 2011 and 2894 of 2011 against Mahuaa Media Private Limited
(“Mahuaa”). Mahuaa has approached the Sessions Court for squashing of the summons issued by Andheri
Metropolitan Magistrate Court. The amount involved in the matter is ` 524.88 lakhs. The Magistrate court
has kept the matter in the month of February, 2013 and on December 29, 2012 the advocate for the other
party made an application that the accused is not able to attend the matter due to ill-health and hence
requested the matter to be adjourned. The matter is currently pending.
Winding up cases
Big Synergy Media Limited has filed a winding up petition dated February 01, 2012 having petition no. 58
of 2012 before the High Court of Judicature at Delhi against Mahuaa Media Private Limited (“Mahuaa”)
for recovery of money in relation to a television show produced by Big Synergy Media Limited for
Mahuaa. The amount involved is `524.88 lakhs. On November 27, 2012 the Hon‟ble Delhi High Court
passed an order directing Mahuaa to pay to Big Synergy `50 Lakhs on or before February 15, 2013 and
also submit an affidavit which shall mention a detailed payment schedule for the balance monies. The
petition has been disposed off with the observation that in case of default by Mahuaa in payment of the
abovementioned sum to Big Synergy, the petition may be revived by Big Synergy. A copy of the order is
yet to be received.
2. Reliance MediaWorks Entertainment Services Limited
Cases filed against Reliance MediaWorks Entertainment Services Limited
Tax Cases
Reliance MediaWorks Entertainment Services Limited received a demand notice dated December 30,
2011 from Navi Mumbai Municipal Corporation for payment of Octroi / Cess Tax as per details provided
below.
Financial
Year
Tax (` in Lakhs) Interest / Penalty
(` in Lakhs)
Total
(` in Lakhs)
2008-09 12.08 57.64 69.72
319
2009-10 84.48 382.69 467.16
Reliance MediaWorks Entertainment Services Limited has preferred an appeal claiming that the company
is a SEZ unit and, is therefore, exempt from payment of Octroi/entry tax under the Maharashtra IT ITEs
Policy 2009. The Directorate of Industries, Government of Maharashtra, issued a letter on January 4, 2012
stating exemption of the company from Octroi/entry tax. The matter is currently pending.
3. Reliance MediaWorks Theatres Limited
Cases filed against Reliance MediaWorks Theatres Limited
Civil Cases
Two separate show cause notices dated August 17, 2010 and September 21, 2010 (the “Show Cause
Notice”) were issued by the Collector, Pune and the Assistant Commissioner of Police (Administration),
Pune, respectively, to Gold Big Cinemas, alleging exhibition of lesser number of Marathi movies than the
number required as per the Maharashtra State Government resolution dated January 4, 2003 read with the
provisions of the Bombay Entertainments Duty Act, 1923. The Collector, Pune has claimed `1.50 lakhs
from Reliance MediaWorks Theatres Limited pursuant to the above-mentioned show cause notice dated
August 17, 2010. Reliance MediaWorks Theatres Limited has filed its written submissions. The matters
are currently pending.
4. Reliance MediaWorks (UK) Limited
Cases filed against Reliance MediaWorks (UK) Limited
Civil Cases
S. Merali has filed a small cause case against Reliance MediaWorks (UK) Limited with a claim value of
approximately GBP 1,500. Reliance MediaWorks (UK) Limited has made a counterclaim with a claim
value of GBP 2,500. The matter is currently pending.
5. Reliance MediaWorks (USA) Inc.
Cases filed by Reliance MediaWorks (USA) Inc.
Civil Cases
Reliance MediaWorks (USA) Inc. filed a legal malpractice complaint against its former counsel
Giarmarco, Mullins & Horton, P.C in the above mentioned civil case (NewBurgh / Six Mile Limited
Partnership v. Adlabs Films USA, Inc.). The matter was dismissed by the United States District Court,
Eastern District of Michigan. Reliance MediaWorks (USA) Inc. has preferred an appeal with the Sixth
Circuit Court of Appeals. The matter is currently pending.
Joint Ventures
1. Swanston Multiplex Cinemas Private Limited
Cases filed against Swanston Multiplex Cinemas Private Limited
Criminal Cases
1. The Brihan Mumbai Municipal Corporation (“BMC”) has filed 2 (two) cases before the Metropolitan
Magistrate, Ville Parle, Mumbai having case nos. 5787 and 5788/SS/2008 dated April 25, 2008
against Shravan Shroff, director of Swanston Multiplex Cinemas Private Limited alleging
320
unauthorized construction of an overhead tank and cooling towers for Fame Big Cinemas theatre. Ld.
Metropolitan Magistrate passed an order dated October 17, 2012 of acquittal and imposed a penalty of
`0.20 lakhs. A copy of the order is yet to be received.
2. BMC has filed a complaint before the Court of Metropolitan, Mumbai Magistrate having case no.
2485/SS/2005 dated September 26, 2005 against Mr. Shravan Shroff and Swanston Multiplex
Cinemas Private Limited for keeping celluloid base film at the theatre in violation of the general
conditions of the license issued by the Municipal Corporation of Greater Mumbai. The matter is
currently pending.
Labour Cases
The workers of Fame (India) Limited and Swanston Multiplex Cinemas Private Limited (through their
union) (“Complainants”) have filed a case no. 424/2010 dated October 13, 2010 before the Industrial
Court, Bandra, Mumbai against Fame (India) Limited and Swanston Multiplex Cinemas Private Limited
(“Defendants”) alleging unfair labour practices. The Defendants have filed their reply to the complaint.
The matter is currently pending.
Tax
1. A notice has been received for the assessment year 2005 – 2006 reopening the assessment and giving
show cause for disallowance under the Income Tax Act for alleged non deduction of TDS on film
rental amounting to `30.95 lakhs paid to non-resident film distributor. Swanston Multiplex Cinemas
Private Limited submitted its response to the notice.
2. Swanston Multiplex Cinemas Private Limited was issued a show cause notice raising demand of
`17.45 lakhs and interest and penalty of `40.13 lakhs for financial year 2008-09 by the Assistant
Commissioner of Sales Tax, Mumbai. Swanston Multiplex Cinemas Private Limited replied to the said
notice partially accepting claims raised by Assistant Commissioner of Sales Tax, Mumbai.
3. Swanston Multiplex Cinemas Private Limited was issued a show cause notice dated 9th
November,
2012 received on 3rd
December, 2012 raising demand of `47.39 lakhs for the financial year 2008-09
and `71.27 Lakhs for the financial year 2005-06 by the Assistant Commissioner of Sales Tax,
Mumbai. The matter is currently pending.
Cases filed by Swanston Multiplex Cinemas Private Limited
Civil Cases
Swanston Multiplex Cinemas Private Limited filed a writ petition before the High Court of Judicature at
Bombay against the State of Maharashtra and other parties in relation to notices issued by the Tahilsdar on
December 5, 2005, December 30, 2005 and January 21, 2006 for alleged non-payment of entertainment
dues amounting to `198.10 lakhs. The High Court of Judicature at Bombay granted relief exonerating
Swanston Multiplex Cinemas Private Limited from payment of the dues. However, this judgment was
reversed by the Supreme Court of India upon an appeal by the State of Maharashtra. Further the State of
Maharashtra was directed to realize the amount claimed and donate the same to a charitable organization.
Swanston Multiplex Cinemas Private Limited has deposited an amount of `187.00 lakhs with the
Tehsildar, representing the State of Maharashtra. A review petition has now been filed by Swanston
Multiplex Cinemas Private Limited in the Supreme Court for a review of the judgment of the Supreme
Court of India. The matter is currently pending.
Swanston Multiplex Cinemas Private Limited has also filed a notice of motion before the High Court of
Judicature at Bombay for recovery of `20.00 lakhs from the Government of Maharashtra which was
321
deposited upon the directions of the High Court at the time of filing the writ petition. The notice of motion
is currently pending.
Cases involving our Directors
1. Gautam Doshi
Cases filed against Gautam Doshi
Criminal Cases
The Central Bureau of Investigation (CBI) has registered a first information report dated October 21, 2009
pertaining to allegations of criminal conspiracy and criminal misconduct, in respect of telecommunications
licences and spectrum allotted by the Government of India inter alia to SwanTelecom Limited in 2008.
Pursuant to the FIR, the CBI filed a charge sheet dated April 2, 2011 in the Court of Special Judge (CBI),
New Delhi, against various persons, including one of our non-executive Directors, Gautam Doshi.
The Special Judge (CBI) has framed charges against all the persons specified in the charge sheet.
Proceedings, in the matter, including a writ petition that Gautam Doshi has preferred to the High Court of
Judicature at Delhi are ongoing.
2. Sujal Shah
Cases filed against Sujal Shah
Civil Cases
Yogendra Naranji Thakkar filed suit No. 2505 of 2012 registered on November 9, 2012 in the High Court
of Judicature at Bombay against Sujal Shah and three others for exemplary, substantial and punitive
damages for defamation. An aggregate amount of `2,800.00 lakhs plus interest at 18% from the date of the
suit till the date of the payment and / reliasation is claimed jointly and severally from the Defendants. The
matter is currently pending.
3. Anil Sekhri
Cases filed by Anil Sekhri
Section 138 of the Negotiable Instruments Act, 1881
Anil Sekhri, one of our directors had filed summary suit no. 3772 of 1998) for recovery of `12.00 lakhs
from one J. B. Singh before the High Court of Judicature at Bombay. The recovery suit was in relation to a
cheque issued by J. B. Singh which was dishonoured. The High Court of Judicature at Bombay on
December 2, 2002 issued a decree against J. B. Singh in the sum of `24.54 lakhs. J. B. Singh has preferred
an appeal no. 382 of 2003 to the High Court of Judicature at Bombay on June 15, 2008 and the matter is
currently pending.
Cases involving our Promoters
1. Reliance Capital Limited
Cases filed against Reliance Capital Limited
Criminal Cases
322
There are 34 criminal cases filed against Reliance Capital Limited by its customers in various courts in
respect of disbursement of loan amounts. These cases are pending at various stages of adjudication.
Majority of these cases are the appeals / revisions in respect of cases filed against the borrowers u/s 138 of
the Negotiable Instruments Act. 1881. These matters are currently pending.
Civil Cases
1. Bharatiben and others (as legal heirs and representatives of late Manubhai Maneklal) (“Plaintiffs”)
have filed a suit no. 1708 of 1997 dated March 25, 1997 before the High Court of Judicature at
Bombay against Reliance Capital Limited for recovery of equity shares delivered by Manubhai
Maneklal and others to Reliance Capital Limited as a custodian in relation to transactions undertaken
by Reliance Enterprises Limited. The aggregate amount involved in this matter is `757.00 lakhs. The
matter is currently pending.
2. Harinarayan Bajaj and others (“Plaintiffs”) have filed a suit no. 2205 of 1997 dated July 1, 1997
before the High Court of Judicature at Bombayagainst Reliance Capital Limited alleging improper
enforcement of security by Reliance Capital Limited in relation to loans amounting to `1,000.00 lakhs
granted by Reliance Capital Limited to the Plaintiffs. The Plaintiffs are claiming refund of the shares
pledged as security along with accrued benefits thereon or a payment of an amount of `164.50 lakhs
with interest at 24%. The matter is currently pending.
Investor Related Disputes
1. There are 52 investor related disputes in respect of shares and 11 cases are in relation to monetary
claims involving an aggregate amount of `9.42 lakhs. Further, there are 61 investor related disputes in
which Reliance Capital Limited has been made a party, but there would be no financial impact on
Reliance Capital Limited. Out of these, 32 cases are in relation to settlement involving brokers or third
parties and 29 cases where settlement is pending for completion of procedural formalities. Further,
there are 53 cases which involve the complainant making payment to Reliance Capital Limited or
providing suitable indemnities and 27 cases where copies of relevant court documents / complaints are
not available.
2. There are 39 investor related disputes filed after the demerger of Reliance Capital Ventures Limited
from Reliance Industries Limited and its subsequent merger with Reliance Capital Limited, where
parties claim to have lost shares pursuant to the said demerger and merger. These cases relate to 1,534
shares in total. Reliance Capital Limited has not been made a party in all these cases. These cases
relate to ownership of shares and shares to be allotted subsequent to the said demerger and merger.
Consumer Cases
There are 234 consumer cases filed against Reliance Capital Limited by its customers in various courts in
respect of disbursement of loan amounts. Such cases include civil, insolvency, arbitration appeals and
matters filed before the various courts. The aggregate amount involved in these matters is `1,074.24 lakhs
and are at various stages of adjudication.
Cases filed by Reliance Capital Limited
Criminal Cases
There are 32133 cases filed by Reliance Capital Limited in various Metropolitan Magistrate courts in
respect of dishonour of cheques given towards repayment of loan. The cases involve an aggregate amount
of `25161.35 lakhs and are at various stages of adjudication.
Arbitration Proceedings
323
1. There are 5,871 cases filed by Reliance Capital Limited before the sole arbitrator for recovery of dues
in respect of loan facilities granted by it to its various customers. The cases involve an aggregate
amount of `68970.08 lakhs and are at various stages of adjudication.
2. There are 4 cases filed under section 9 of the Arbitration and Conciliation Act, 1996 for interim reliefs
against the borrowers before the Honourable High Court of Bombay against the borrower.
Cases involving our Group Companies
Except for the litigation in which our Company is also a party, none of the litigation against the Group
Companies is likely to have any adverse effect on the financial performance of our Company.
Cases filed against our Group Companies
1. Reliance Broadcast Network Limited
Cases filed against Reliance Broadcast Network Limited
Civil Cases
1. Subhiksha Trading Services Limited (“Plaintiff”) has filed a suit before the Additional City Civil
Court, Chennai against Hash 10 Telecom Private Limited, Reliance Broadcast Network Limited and
others for restraining the airing of certain advertisement alleged to be defamatory. Reliance Broadcast
Network Limited has filed its written statement. The matter is currently pending.
2. Leading Edge has taken out 5 (five) Chamber Summons for changing the name from Reliance Media
World Limited to Reliance Broadcast Network Limited in connection with recovery of an amount of
approximately `64.00 lakhs. The application has been allowed. Summons is yet to be served to
Reliance Broadcast Network Limited.
3. Narendra Kumar Gupta, proprietor of Jai Durga Tent & Light Decorators has filed a suit before the
District Court, New Delhi, against Reliance Broadcast Network Limited for non – payment of dues for
services rendered by him aggregating to `6.85 lakhs. The matter is currently pending.
4. Rajender Mathur and two others have filed a suit before the District Court, Hisar, against Reliance
Broadcast Network Limited for recovery of damages caused to premises licensed to Reliance
Broadcast Network Limited aggregating to `6.82 lakhs. The matter is currently pending.
5. De Kulture Music Pvt. Ltd. has filed a suit before the District Sessions Judge, Jaipur, against Reliance
Broadcast Network Limited for obtaining injunction against broadcasting of certain sound recordings.
The matter is currently pending.
6. Sunrise Advertising Pvt. Ltd. has filed a petition before the District Court, New Delhi against Reliance
Broadcast Network Limited for injunction against the airing of certain radio spots aired by Reliance
Broadcast Network Limited, alleging them to be defamatory in nature and also claiming the amount
payable for the suit instituted. The matter is currently pending.
7. Regency Ceramics Limited has filed a petition before the City Civil Court, Hyderabad, against
Reliance Broadcast Network Limited for injunction against the airing of certain radio spots aired by
Reliance Broadcast Network Limited, alleging them to be defamatory in nature and also claiming an
amount of `125 lakhs towards damages. The matter is currently pending.
8. Simran Kohli has filed a petition before the Saket District Court at New Delhi against Reliance
Broadcast Network Limited for injunction against the airing of certain radio spots aired by Reliance
324
Broadcast Network Limited, alleging them to be defamatory in nature and also claiming the costs of
the suit. The matter is currently pending.
9. Amarjot Singh Bath has filed a petition before the Civil Court in Chandigarh against Reliance
Broadcast Network Limited for recovery of monies allegedly payable to him for the services rendered
by him. The amount involved in the matter is „3.30 lakhs. The matter is currently pending.
Tax Cases
A notice was issued by the Excise & Taxation Officer, Punjab (“ETO”) against Reliance Broadcast
Network Limited for improper documentation of goods under transport. Thereafter, an order dated July 28,
2007 was passed by the ETO against Reliance Broadcast Network Limited for detention of the goods.
Reliance Broadcast Network Limited obtained release of the goods and preferred an appeal to the Deputy
Excise and Taxation Commissioner cum Joint Director of Enforcement, Patiala (“Excise
Commissioner”). The Excise Commissioner disposed the appeal and remanded the matter back to the
ETO. The ETO passed a similar order dated March 7, 2009 against which Reliance Broadcast Network
Limited has filed a fresh appeal to the Deputy Excise and Taxation Commissioner-Cum-Joint Director
Enforcement, Patiala Division, Patiala. The aggregate amount involved in this matter is `2.57 lakhs. The
matter is currently pending.
A Writ Petition has been filed by the Sales Tax Department before the High Court of Jammu & Kashmir
against the order passed by the State Tax Appellate Tribunal in favour of Reliance Broadcast Network
Limited claiming an amount of `68 lakhs. The matter is currently pending
Labour Cases
1. Priti Suiru (“Claimant”) has filed a claim before the Industrial Tribunal, Panaji against Reliance
Broadcast Network Limited alleging wrongful termination of employment and claiming reinstatement
and payment of outstanding wages. The amount involved in the matter is `3.00 lakhs. The order has
been passed in favour of the Claimant. Reliance Broadcast Network Limited has filed a writ petition
before the Bombay High Court at Goa against the said order.
2. Mahamaya Jena (“Claimant”) has filed a complaint before the Labour Court, Bhubaneswar against
Reliance Broadcast Network Limited claiming an amount of `2.28 lakhs towards performance
incentive. The matter is currently pending.
3. Munish Ohja (“Claimant”) has filed a claim before the Labour Court, Chandigarh against Reliance
Broadcast Network Limited claiming amounts aggregating to `0.30 lakhs towards leave encashment.
The matter is currently pending.
4. Meenakshi Bhojwani (“Claimant”) has filed an application before the High Court of Judicature at
Delhi against Reliance Broadcast Network Limited challenging the arbitral award dated December 30,
2009 passed by B. L. Garg, sole arbitrator in favour of Reliance Broadcast Network Limited. The
arbitral award dated December 30, 2009 was in relation to an employment contract and employment
bond, entered into between Reliance Broadcast Network Limited and Meenakshi Bhojwani, former
employee. The amount involved in the matter is `21.87 lakhs. The matter is currently pending.
5. Quadir Ashraf (“Claimant”) has filed a claim before the Labour Court, Jammu, against Reliance
Broadcast Network Limited claiming amounts aggregating to `3.84 lakhs towards leave encashment
and performance bonus. The matter is currently pending.
Stamp Duty Cases
A notice dated April 30, 2007 was issued by the Court of Additional Commissioner (Stamps), Aligarh
(“Stamps Commissioner”) against Reliance Broadcast Network Limited alleging evasion of stamp duty
325
payable on lease renewals. The aggregate amount involved in this matter is `8.19 lakhs. The Stamps
Commissioner passed an order dated October 22, 2009 against Reliance Broadcast Network Limited.
Thereafter, Reliance Broadcast Network Limited has filed a writ petition before the High Court of
Judicature at Allahabad for quashing of the said order. The High Court of Judicature quashed the orders
of the lower court and the matter has been remanded to the Assistant Commissioner (Stamp) for
determination of stamp duty payable. The Writ Petition has been allowed – however, the order copy is
awaited.
Notices
5 (Five) separate show cause cum demand notices were issued by the Commissioner Service Tax, Mumbai
against Reliance Broadcast Network Limited for an amount aggregating to `1,421 lakhs. Reliance
Broadcast Network Limited has filed its replies against these show cause cum demand notices and the
matter is currently pending.
Cases filed by Reliance Broadcast Network Limited
Civil Cases
1. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Bombay
against the Maharashtra State Road Development Corporation Limited for recovery of amounts paid
by Reliance Broadcast Network Limited under an agreement dated May 17, 2009 as security deposit
and advance license fees along with interest. The amount involved in this matter is `540.00 lakhs. The
matter is currently pending.
2. Reliance Broadcast Network Limited has filed a recovery suit against Sunrise Advertising Private
Limited for recovery of monies due from them. The amount involved in the matter is ‟18.80 lakhs. The
matter is yet to be admitted and hence is pending.
3. Reliance Broadcast Network Limited has filed a summary suit before the City Civil Court at
Ahmedabad for recovery of `179 lakhs from Ahmedabad Municipal Corporation. The matter is
currently pending.
Arbitration Proceedings
1. Reliance Broadcast Network Limited has initiated an arbitration proceeding before a sole arbitrator
against Access Atlantech Entertainment Limited in relation to payment for certain services rendered
by Reliance Broadcast Network Limited. An interim order dated March 1, 2011 has been passed in
favour of Reliance Broadcast Network Limited in relation to the admissibility of the arbitration
proceeding. The aggregate amount involved in this matter is `34.30 lakhs. The matter is currently
pending.
2. Reliance Broadcast Network Limited has initiated an arbitration proceeding in relation to breach of
employment contract and employment bond entered into between Reliance Broadcast Network
Limited and Meenakshi Bhojwani, former employee. Reliance Broadcast Network Limited obtained
award dated December 30, 2009 in its favour and the same has been challenged before the High Court
of Judicature at Delhi by Meenakshi Bhojwani. An execution petition has also been filed before the
District Judge, Chandigarh by Reliance Broadcast Network Limited for executing the arbitral award
dated December 30, 2009. The aggregate amount involved in the matter is `21.87 lakhs. The matter is
currently pending.
3. Reliance Broadcast Network Limited had initiated an arbitration petition in Hyderabad in connection
with the dispute with M/s Stanpower in which Reliance Broadcast Network Limited is claiming an
amount of `415.17 lakhs on account of breach by Stanpower of the terms and conditions of an
agreement executed with Reliance Broadcast Network Limited. The matter is currently pending.
326
4. Reliance Broadcast Network Limited has a pending dispute with Broadcast Engineering consultant
India Ltd. (“BECIL”) for an amount of ` 3,896.87 lakhs. 2 (two) separate applications have been filed
by Reliance Broadcast Network Limited before the High Court of Judicature at Delhi, under Sections
9 and 11 of the Arbitration & Conciliation Act, 1996, for the appointment of an arbitrator to resolve
the dispute with BECIL. The matter is currently pending.Reliance Broadcast Network Limited has
filed two applications under section 11 of the Arbitration and Conciliation Act, 1996 before the High
Court of Judicature at Bombay for the appointment of an arbitrator to resolve the dispute with Mahuaa
Media Private Limited,. The total amount involved in this matter is `56.28 lakhs. The matter is
currently pending.
5. Reliance Broadcast Network Limited has filed an application under Section 11 of the Arbitration and
Conciliation Act, 1996, before the High Court of Bombay for the appointment of an arbitrator to
resolve the dispute with Moon Up Info Tech Private Limited and Mangla Add Creation. The total
amount involved in the matter is `42.24 lakhs. The matter is currently pending.
6. Reliance Broadcast Network Limited has filed 6 separate Section 11 applications under the Arbitration
and conciliation Act, 1996, before the Delhi High Court challenging the appointment of the arbitrator
appointed by Delhi Metro Rail Corporation in the ongoing dispute with Delhi Metro Rail Corporation.
The matter is currently pending.
7. Reliance Broadcast Network Limited has filed an application under Section 9 of the Arbitration and
Conciliation Act, 1996, before the High Court of Punjab and Haryana at Chandigarh for restraining
Haryana Road Transport Corporation (HRTC) from invoking gthe Bank Guarantee (BG). The interim
order of the court restraining HRTC from invoking the BG till the next date of hearing has been
obtained. The matter is currently pending.
Section 138 of the Negotiable Instruments Act, 1881
42 cases have been filed by Reliance Broadcast Network Limited under sections 138 and 142 of the
Negotiable Instruments Act, 1881 for recovery of dues and dishonour of cheques. The aggregate amount
involved in these cases is approximately `319.42 lakhs. These matters are pending.
Intellectual Property Proceedings
1. Reliance Broadcast Network Limited has filed 16 compulsory licensing application in accordance with
Section 31 (1) (b) of the Copyright Act, 1957, before the Indian Copyright Board against various
music labels to allow Reliance Broadcast Network Limited to broadcast the work from repertoire of
the respective music labels on payment of certain percentage of the net advertising earnings of each of
its radio station. The matter is currently pending.
2. Reliance Broadcast Network Limited has filed a complaint under Section 19A(2) read with Section
30A of the Indian Copyright Act, 1957, before the Indian Copyright Board against Indian Performing
Rights Society and Super Cassettes Industries Limited to refund the royalty paid by Reliance
Broadcast Network Limited as performance royalty. The matter is currently pending.
3. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at
Bombayfor declaration, permanent and mandatory injunction & recovery against Indian Performing
Rights Society. The matter is currently pending.
4. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Delhi for
declaration, permanent and mandatory injunction & recovery against Super Cassettes Industries
Limited. The matter is currently pending.
Winding up cases
327
1. Reliance Broadcast Network Limited has filed a winding up petition before the High Court of
Judicature at Chennai against Subhiksha Trading Services Limited for non-payment of liabilities
amounting to approximately `43.49 lakhs. The winding up has been ordered by the court.
2. Reliance Broadcast Network Limited has filed a winding up petition before the High Court of
Judicature at Bombay against Raj Oil Mills Limited for non-payment of liabilities amounting to
approximately `178.12 lakhs. The matter is pending.
3. Reliance Broadcast Network Limited has filed a winding up petition before the Delhi High Court
against Mahuaa Media Private Limited for non-payment of liabilities amounting to approximately `56
lakhs. The matter is currently pending.
2. Reliance Capital Asset Management Limited
Cases filed against Reliance Capital Asset Management Limited
Civil Cases
1. Vinny Trehan (through Radha Rani) (“Plaintiff”) has filed a suit before the Civil Judge, Junior
Division, Amritsar against Reliance Capital Asset Management Limited for making a transmission of
mutual fund units on the basis of a nomination made by deceased investor of Reliance Mutual Fund
(“RMF”), which is alleged to be against the terms of the will produced by the Plaintiff. The aggregate
amount involved in this matter is `3.67 lakhs. The matter is currently pending.
2. Siddharth Deepak Chury has filed a suit before the High Court of Judicature at Bombay against
Prabhakar Deepak Chury and Reliance Capital Asset Management Limited for obtaining possession of
a flat owned by Siddharth Deepak Chury which was being occupied by Reliance Capital Asset
Management Limited on leave and license basis. Reliance Capital Asset Management Limited has
retained possession of the flat since the security deposit paid by Reliance Capital Asset Management
Limited was not refunded upon expiry of the license. The aggregate amount involved in this matter is
`10.00 lakhs. The matter is currently pending.
3. Pramila Lodha (“Plaintiff”) has filed a suit before the High Court of Judicature at Bombay against
Edelweiss Securities Limited and Reliance Capital Asset Management Limited. The Plaintiff had
provided a power of attorney in favour of Edelweiss Securities Limited and directed Reliance Capital
Asset Management Limited to mark a lien on her folio in favour of Edelweiss Securities Limited. In
the present dispute, the Plaintiff has moved to the High Court for issuing directions to Reliance Capital
Asset Management Limited not to act on instructions of the Edelweiss Securities Limited. The
aggregate amount involved in this matter is `12.73 lakhs. The matter is currently pending.
4. Kanti Gupta and Tanushree Varshney (through Kanti Gupta) (“Plaintiffs”) have filed a suit before the
Civil Judge (Senior Division), Kanpur Nagar against Shweta Varshney, Reliance Capital Asset
Management Limited and 22 others (“Defendants”) seeking a permanent injunction against Shweta
Varshney from making payments to Defendant Nos. 2 to 23 in relation to investments held in the name
of Vivek Varshney, deceased son of Kanti Gupta, and for a decree of declaration of the Plaintiffs‟
share in Vivek Varshney‟s property. The matter is currently pending.
5. Dr. Murad A. Rahman (“Plaintiff”) has filed a suit before the High Court of Judicature at Delhi
against Ayesha Swathy Rehman, Reliance Capital Asset Management Limited and others for
declaration, partition and a permanent and mandatory injunction. The High Court of Judicature at
Delhi has directed Reliance Capital Asset Management Limited to freeze the mutual fund investments
of the Plaintiff‟s father, late M.A. Rahman, until the matter is disposed off. The amount involved in
the matter is `8.63 lakhs. The matter is currently pending.
328
6. Ravi Ghai (“Plaintiff”) has filed a suit before the High Court of Judicature at Delhi against Mala
Mehra and others in relation to the estate of late Krishna Ghai, an investor in Reliance Mutual Fund.
The amount involved is `100.00 lakhs. The matter is currently pending.
7. V. Sundar has filed a petition before the District Judge, Coimbatore in relation to the transmission of
mutual fund units on the basis of the nomination made by D K P Varadarajan, the deceased investor.
The units of mutual fund held in the folio of D K P Varadarajan have been freezed pending the
disposal of the suit by the competent court. The amount involved in the matter is `1.35 lakhs. The
matter is currently pending.
8. Siddharth Shukla (“Plaintiffs”) has filed a suit before the Additional District Judge, Jabalpur M.P., in
relation to recovery of `1.35 lakhs towards non receipt of units in Reliance Diversified Power Sector
Fund.
9. Indian Dairy (“Plaintiffs”) has filed a suit before Senior Civil Judge, Rohini, Delhi in relation to
recovery of `1.50 lakhs towards non allotment of units in Reliance Liquid Plus Fund.
10. Minor Gitanshu Agarwal & Minor Taejaal Agarwal (represented by their natural father, Sanjoy
Kumar Agarwal) (“Plaintiffs”) have filed a suit before the Civil Judge (Jr. Div.) Howrah against RMF
& others for declaration to the effect that the redemption amount which was paid by Defendant No. 1
(RMF) to Defendant No. 2, being the grandfather of Minor Gitanshu Agarwal & Minor Taejaal
Agarwal belongs to the Plaintiff.
11. Piyush Chandra (“Plaintiff”) has filed a suit at High Court of Judicature at Delhi, against Reliance
Mutual Fund and others for obtaining a decree for permanent injunction.
12. Manoj Kumar Sharma (“Plaintiff”) has filed a case in the Court of Magistrate of First Class, Family
Court, Bareily against Neetu Singh & Ors. and including Reliance Capital Asset Management Limited
as a party for transfer of units invested in the name of Neetu Singh to his name.
13. Mamta Tiwari (“Plaintiffs”) has filed a suit before the Hon‟ble Court of Judicial Magistrate of First
Class against Reliance Mutual Fund and others for succession to the properties of Madhu Sudan
Tiwari who was an investor of Reliance Mutual Fund. The amount involved is `0.11 lakhs. The matter
is currently pending.
14. MGD Electronics & Mr. Rajesh Rathi (“Plaintiffs”) have filed a suit before the Hon‟ble Civil Judge,
Gandhinagar against YES Bank Ltd, Ms. Shruti Panchal, RMF and others for recovery of a total
amount of `33.67 lakhs in respect of losses incurred as a result of an alleged fraud conducted on the
Plaintiffs. The amount involved is `2.13 lakhs and interest thereon. The matter is currently pending.
15. Smt Rajam Srinivasan filed a suit against Reliance Capital Asset Management Limited alleging
wrongful allotment of units of mutual funds to Sujatha against cheque submitted by her for an amount
of `3.00 lakhs. An order was passed by the High Court of Judicature at Chennai directing Reliance
Capital Asset Management Limited to deposit a sum of `5.16 lakhs with the Registrar of the Court.
Reliance Capital Asset Management Limited preferred an appeal. The matter is currently pending.
16. T Shobhana & Velayudha Nair filed a suit for injunction before the Civil Court, Thiruvananthapuram
against Ms. Deepa, HSBC, Axis Bank, Reliance India Limited and others. The Court has directed
Reliance Capital Asset Management Limited to freeze the mutual fund investments of the Mr. Anoop
Vrindavan, until the matter is disposed off. The amount involved in the matter is ₹1.55 lakhs. The
matter is currently pending.
17. Siddharth Shukla has filed a writ petition before the High Court of Madhya Pradesh, Principal Seat at
Jabalpur, for recovery of `1.35 lakhs in relation to non receipt of units in Reliance Diversified Power
Sector Fund. The applicant has prayed for dismissal of the application filed by Reliance Mutual Fund
329
for making the broker/agent a necessary party to the case. The application has been allowed by
Additional District Judge, Jabalpur M.P. The matter is currently pending.
18. Shri Hari Prakash Verma has filed a suit before the Court of First Additional Civil Judge (Sr.
Division), Kanpur against Chandrawati Verma & others for freezing the mutual fund investments held
with Reliance Mutual Fund by Chandrawati Verma. The Court of has directed Reliance Capital Asset
Management Limited to freeze the said mutual fund investments until the matter is disposed off. The
amount involved is `0.9 lakhs. The matter is currently pending.
19. Mrs. Girija Gunaseelan, an investor of Reliance Mutual Fund and others filed a suit before the Court
of Principal Subordinate Judge of Coimbatore against ICICI Bank Ltd, Reliance Capital Asset
Management Limited and others for succession to the properties of S. Gunaseelan. The amount
involved is `1.97 lakhs. The matter is currently pending.
Consumer Cases
There are 26 consumer related complaints filed against Reliance Capital Asset Management Limited
before various District and State Consumer Disputes Redressal Forums. In certain cases the branch
managers, regional managers and chief executive officer/ managing director of Reliance Capital Asset
Management Limited have also been added as parties. These matters involve allegations relating to inter
alia deficiency in service, fraud committed by third parties, rejection of application for allotment of units,
refusal for redemption of units and non-receipt of dividend. The approximate amount involved in these
matters is `170.00 lakhs. The matters are currently pending.
Cases filed by Reliance Capital Asset Management Limited
Civil Cases
Reliance Capital Asset Management Limited has filed an application before the High Court of Judicature
at Bombay for permission to act as an agent of the receiver appointed by the High Court in the suit (no.
1937 and 1938 of 2000) filed by Siddharth Deepak Chury against Prabhakar Deepak Chury and others for
a flat owned by Siddharth Deepak Chury which was being occupied by Reliance Capital Asset
Management Limited on leave and license basis. Reliance Capital Asset Management Limited has retained
possession of the flat since the security deposit paid by Reliance Capital Asset Management Limited was
not refunded upon expiry of the license. The aggregate amount involved in this matter is `10.00 lakhs. The
matter is currently pending.
Consumer Cases
Reliance Capital Asset Management Limited has preferred an appeal to the State Consumer Disputes
Redressal Commission, Maharashtra (Aurangabad Bench) against an order of the District Consumer
Disputes Redressal Forum. The aggregate amount involved in this matter is approximately `0.10 lakhs.
The matter is currently pending.
3. Reliance General Insurance Company Limited
Cases filed against Reliance General Insurance Company Limited
Civil cases
Mr.Rajeev Kumar Garg, the land lord of Muzafarnagar premises filed case against Reliance General
Insurance Company Limited for the recovery of `14.33 lakhs for the renovations which was done by him.
A written statement has been filed along with an application for rejection of plaint and the matter is posted
for hearing on April 8, 2013.
Consumer cases
330
There are 7,166 Consumer Cases involving an aggregate amount of `6,225.76 lakhs. The matters are
pending before various Consumer Forums.
Insurance Claims
There are 25,056 claims pending before the Motor Accidents‟ Claims Tribunal (“MACT”) against
Reliance General Insurance Company Limited involving an aggregate amount of `25,413.69 lakhs. The
matters are currently pending before various tribunals.
Cases filed by Reliance General Insurance Company Limited
Civil Cases
A civil suit has been filed against ICICI Bank in the High Court of Judicature at Bombay under Original
Ordinary Civil Jurisdiction claiming wrongful debit of a sum of `24.54 lakhs and seeking recovery of the
same. The next date of hearing is March 18, 2013.
Arbitration Proceedings
Reliance General Insurance Company Limited has filed two arbitration applications at Delhi against Mac
Overseas and Allied Enterprises (“Defendants”) for refund of the security deposit paid to the Defendants
by Reliance General Insurance Company Limited in relation to the premises, furniture and fixtures taken
by Reliance General Insurance Company Limited on leave and license basis. The aggregate amount
involved in the matter is `18.60 lakhs. The matter is currently pending.
4. Reliance Securities Limited
Cases filed against Reliance Securities Limited
Civil Cases
1. Amit Bhargava (“Appellant”) has preferred an appeal to the High Court of Judicature at Delhi against
Reliance Securities Limited challenging the arbitration award dated December 24, 2009 in favour of
Reliance Securities Limited. The Appellant had filed an arbitration application before a panel of
arbitrators at NSE, New Delhi against Reliance Securities Limited claiming reversal of the contract
executed on NSE among other claims towards damages and compensation. The amount involved in
the matter is `1,900 lakhs. The matter is currently pending.
2. A writ petition has been filed by a group of 59 clients before the High Court at Guwahati. The marrters
relate to unauthorised sale of Oil India shares in the months of September 2009 by a local sub-broker
in Tinsukia, Assam. The complainants have prayed for issuance of directions to SEBI to conduct an
enquiry and investigation. The matter is currently pending.
3. Jayshree Gupta, an ex-employee of Reliance Securities Limited, has filed a suit before the district
court in Delhi alleging illegal, unlawful, arbitraty terminantion of services. The complanint has sought
for an aggregate amount of ₹9.42 lakhs. The matter is currently pending.
4. Two (2) petitions were filed before the High Court of Judicature, Delhi against Reliance Securities
Limited for reimbursement of service tax and claim of the balance rent under lease agreements for 2
(two) office premises rented by Reliance Securities Limited in Delhi. The High Court order in both
matters was given against Reliance Securities Limited. Subsequently, Reliance Securities Limited has
preferred an appeal against both the orders before the Supreme Court of India. The aggregate amount
involved in these matters is `15.00 lakhs. The matters are currently pending.
331
Consumer Cases
1. There are 6 (six) consumer complaints filed against Reliance Securities Limited before consumer
disputes redressal fora in various states and districts. The aggregate amount involved in these matters
is `39.02 lakhs. The matters are currently pending.
2. Laxmi Tomar, Bhopal and Sanjay Mehta, Gujarat ("Appellant") have preferred appeals to the
respective State Consumer Dispute Redressal Commission, against the orders given by the District
forum in favour of Reliance Securities Limited in respect of certain trades executed in illiquid scrip
and unauthorised trades in their accounts by the company. The amount involved in these matters is
`4.31 lakhs. The matters are currently pending.
Labour cases
Mehul Dubey has filed a complaint against Reliance Securities Limited before the Industrial Tribunal /
Labour Court Jammu / Srinagar. The matter related to illegal termination of services without following
due process of law. The complainant has prayed for reinstatement and backwages. The matter is currently
pending.
Cases filed by Reliance Securities Limited
Consumer Cases
Reliance Securities Limited has filed two separate appeals before the State Commission, Mumbai and one
before the State Commission of Jaipur for setting aside impugned order passed by the respective district
forums at Sindhudurg and Jaipur. The amount involved in the matter is ₹4.58 lakhs. The matters are
currently pending.
Arbitration Proceedings
1. Reliance Securities Limited has preferred an appeal to the High Court of Judicature at Bombay against
the Arbitration award dated August 18, 2010 in the matter of arbitration before NSE, Mumbai in the
case filed by Badrinath Bodhai against Reliance Securities Limited. The amount involved in the matter
is `4.14 lakhs. The matter is currently pending.
2. Reliance Securities Limited has filed an appeal before the NSE Appellate Arbitration, Chennai against
Rajesh Anthony challenging the arbitration award dated October 3, 2012 of the NSE, Chennai. The
aggregate amount involved is ₹14.20 lakhs. The matter is currently pending.
3. Reliance Securities Limited has filed 12 arbitration petitions against its clients before various stock
exchanges for recovery of the outstanding ledger balance in the clients‟ accounts. The amount
involved in these matters is approximately `32.62 lakhs. In eleven of these matters, the Arbitrator has
passed orders in favour of Reliance Securities Limited. In one of these cases, the Arbitrator has passed
orders against Reliance Securities Limited. These orders are pending execution.
Section 138 of the Negotiable Instruments Act, 1881
Reliance Securities Limited has filed criminal complaints under section 138 of the Negotiable Instruments
Act, 1881, against 2 (two) clients for dishonour of cheques amounting to `9.84 lakhs. The matters are
currently pending.
5. Reliance Commodities Limited
Cases filed by Reliance Commodities Limited
Criminal cases
332
Reliance Commodities has filed an application before the High Court of Judicature, at Ahmedabad for
quashing of the criminal complaint pending before the local police at Ahmadabad in respect of the
complaint filed by one of the commodity client alleging unauthorized transactions in his account along
with his family member‟s accounts. A settlement agreement was entered into between the parties and the
same was communicated to FMC and MCX. The matter is currently pending.
Section 138 of the Negotiable Instruments Act, 1881
Reliance Commodities Limited has filed complaints under section 138 of the Negotiable Instruments Act,
1881, against 3 (three) customers for dishonour of cheques amounting to `13.7 lakhs. The Court has
issued bailable warrants in all three complaints. The matters are pending.
6. Reliance Money Express Limited (RMEX)
Cases filed against Reliance Money Express Limited
Civil Cases
Pritpal Kaur has filed a suit before Civil Judge (Senior Division), Chandigarh against RMEX and others
for recovery of arrears on lease rent pertaining to the Branch office occupied by Reliance Money Express
Limited during the period 2008 to 2010. The amount involved is `1.03 lakhs. The matter is currently
pending.
Cases filed by Reliance Money Express Limited
Civil Cases
RMEX has filed a suit before the Subordinate Court at Kottayam against Cee & Cee Gold & Forex Pvt.
Ltd & others for recovery of money advanced to them for conversion to foreign currency. The amount
involved in the matter is `235 lakhs. The matter is pending.
Section 138 of the Negotiable Instruments Act, 1881
RMEX has filed complaints under Section 138 of the Negotiable Instruments Act, 1881, against a
defaulting client, M/s Globe Explorer for dishonour of cheques amounting to `3.00 lakhs. The matter is
pending.
7. Reliance Life Insurance Company Limited (RLIC)
Cases Filed against RLIC
Criminal Cases
76 complaint/ first information reports have been filed against certain employees, ex employees, advisors,
agents and distributors of Reliance Life Insurance Company Limited under various sections of the IPC in
various police stations across India. The Complaint / FIRs have been filed in relation to allegations of inter
alia forgery, cheating, criminal breach of trust, issuance of fake receipts, theft at office premises, spurious
calling, wrong surrender of policies, wrong encashment of surrender cheques, insurance, dead persons, etc.
The matters are currently under police investigation.
Civil Cases
1. Dhruv Kumar (“Petitioner”) has filed a writ petition in the nature of public interest litigation before
the Lucknow bench of High Court of Judicature at Allahabad against the Union of India, Insurance
333
Regulatory and Development Authority, SEBI, Reliance Life Insurance Company Limited and 13
other insurance companies. The Petitioner is challenging the validity and sale of Unit Linked
Insurance Products. The matter is currently pending.
2. Rajiv Lohia (“Plaintiff”) has filed a suit before the High Court of Judicature at Calcutta against
Reliance Life Insurance Company Limited alleging non-payment of certain sums owed by Reliance
Life Insurance Company Limited to the Plaintiff. The amount involved in the matter is `10.52 lakhs
along with interest at a rate of 18% p.a. The matter is currently pending.
3. Bal Natrajan (“Petitioner”) has filed a writ petition before the High Court of Judicature at Kerala
challenging the order dated August 31, 2007 of the Insurance Ombudsman, Cochin. The Petitioner is
challenging the cancellation of an insurance policy by Reliance Life Insurance Company Limited. The
amount involved in the matter is `0.50 lakhs. The matter is currently pending.
4. 73 civil cases have been filed before various civil courts against Reliance Life Insurance Company
Limited for disputes in relation to inter alia repudiation of claims, recovery of commission,
commercial disputes, injunction for termination of services and termination of lease deeds. The
amount involved in the matters is approximately `298.00 lakhs. The matters are currently pending.
5. 12 cases have been filed before Lok Adalats at various locations against Reliance Life Insurance
Company Limited involving disputes relating to repudiation of claims, wrongful termination and
deficiency in service. The amount involved in these matters is approximately `41.00 lakhs. The
matters are currently pending.
6. Hartford Academy of Insurance and Education Private Limited have filed a suit before the High Court
of Judicature at Chennai against Reliance Life Insurance Company Limited for recovering an amount
of `94.72 lakhs towards the alleged unpaid bills. The matter is currently pending.
Arbitration Cases
Syntel Global Private Limited (“Claimant”) has commenced arbitration proceedings before Rohit Kapadia,
Arbitrator, Mumbai against Reliance Life Insurance Company Limited alleging non-provision of services
required to be rendered under letters of intent dated March 1, 2008 and April 1, 2008 issued by Reliance
Life Insurance Company Limited and a master services agreement dated September 19, 2008 entered into
with Reliance Life Insurance Company Limited. The Claimant seeks payment of `1,120.25 lakhs with
interest at a rate of 18% p.a. along with the arbitration costs or a sum of `989.17 lakhs for expenditure
incurred towards setting up office infrastructure along with the arbitration costs. The matter is currently
pending.
Tax Cases
1. Reliance Life Insurance Company Limited has preferred an appeal to the Commissioner of Income
Tax (Appeals), Chennai (“CIT”) against an order passed by the Assistant Director of Income Tax,
International Taxation, Chennai, in relation to classification of royalty payment made to the AMP
Group, Australia. The amount involved in the matter is `5.23 lakhs. The matter is currently pending.
2. Reliance Life Insurance Company Limited has preferred an appeal to the Small Causes Court of
Bombay against an order dated August 8, 2008 passed by the Municipal Corporation of Greater
Mumbai (“MCGM”) directing Reliance Life Insurance Company Limited to pay property tax in
accordance with the enhanced value of a leasehold property of Reliance Life Insurance Company
Limited in Ghatkopar, Mumbai. The MCGM has filed the details of computation of the property tax,
claiming arrears of `93.00 lakhs from Reliance Life Insurance Company Limited before the Court and
Reliance Life Insurance Company Limited has replied to the same. The matter is currently pending.
334
3. Reliance Life Insurance Company Limited has preferred an appeal to the Commissioner (Appeals) in
Customs Excise and Service Tax Appellate Tribunal (“CESTAT”), South Zonal Bench, Chennai
against an order of the Commissioner (Appeal), Chennai in relation to disallowance of ineligible credit
of service tax. The amount involved in the matter is `33.80 lakhs. The matter is currently pending.
4. Reliance Life Insurance Company Limited has preferred appeals to the Commissioner of Income Tax
(Appeal), Mumbai against orders of the TDS Officer, Mumbai in relation to short deduction of tax.
The amount involved in the matter is ` 734.48 lakhs. The matters are currently pending.
Labour Cases
9 complaints have been filed before different labour conciliation officers against Reliance Life Insurance
Company Limited involving allegations of inter alia illegal termination and non-payment of wages.
Reliance Life Insurance Company Limited has filed its replies before the respective labour authorities.
Consumer Cases
1. 38 appeals have been preferred to the respective State Consumer Disputes Redressal Commissions
challenging the orders of the various District Consumer Disputes Redressal Forums passed in favour
of Reliance Life Insurance Company Limited. The amount involved in the matters is approximately
`315.90 lakhs. The matters are currently pending.
2. 530 consumer complaints have been filed before consumer disputes redressal fora in various districts
and states of India against Reliance Life Insurance Company Limited. These matters involve
allegations relating to inter alia claims repudiation, non-receipt of policy documents and deficiency of
service. The amount involved in the matters is approximately `1,221.00 lakhs. The matters are
currently pending.
3. Reliance Life Insurance Company Limited has preferred 40 appeals to various State Consumer
Disputes Redressal Forums against orders of the respective District Consumer Disputes Redressal
Commissions. The amount involved in the matters is approximately `120.00 lakhs. The matters are
currently pending.
4. 1 Appeal has been preferred to the respective National Consumer Disputes Redressal Commissions
challenging the order of State Consumer Disputes Redressal Commission passed in favour of Reliance
Life Insurance Company Limited. The amount involved in the matters is approximately `20.50 lakhs.
The matters are currently pending.
5. Reliance Life Insurance Company Limited has preferred 1 Appeal to National Consumer Disputes
Redressal Commissions against order of the respective District Consumer Disputes Redressal Forum
and State Consumer Dispute Redressal Commission. The amount involved in the matters is
approximately `4.8 lakhs. The matters are currently pending.
Insurance Cases
1. 235 complaints have been filed before the Insurance Ombudsman at various locations against Reliance
Life Insurance Company Limited involving disputes relating to inter alia refusal to refund the
premium, cancellation of policy, unilaterally change in terms of the policy. The amount involved in
these matters is not ascertainable. Reliance Life Insurance Company Limited has replied to 145
complaints and is in the process of replying to the remaining complaints.
2. 4127 complaints have been filed by policy holders received and have been received by Reliance Life
Insurance Company Limited from Insurance Regulatory and Development Authority and Life Council
involving disputes relating to inter alia miss-selling, non-processing claims, repudiation of claims,
rejection of claims, refusal to refund premium amounts, non-issue of premium receipts, unilaterally
335
changing the terms of the policy, non receipt of the policy documents, recovery of money, fraud
committed by employees of Reliance Life Insurance Company Limited and deficiency of services. The
amount involved in these cases is not ascertainable. Reliance Life Insurance Company Limited has
replied to 4127 complaints and is in the process of replying to 12 complaints which are over 15 days
of ageing.
Notices
1. 195 inspection notices were issued by various labour enforcement officers against different branches
of Reliance Life Insurance Company Limited in relation to compliances under labour laws. Reliance
Life Insurance Company Limited has replied to 189 of these notices and is in the process of replying
to the 6 remaining notices.
2. 529 legal notices were issued against Reliance Life Insurance Company Limited in relation to various
issues pertaining to policy matters having claim and non-claim disputes, notices from statutory /
regulatory authorities, non-payment of the lease rentals, commercial disputes, unilateral termination or
breach of lease / leave and license agreements. We have replied to 506 notices and 23 are in the
process of being replied.
Cases Filed by RLIC
Criminal Cases
Reliance Life Insurance Company Limited has filed separate criminal cases against Siddharth Patel and
Parin Mistry, former employees, for misappropriation of money, cheating and forgery. The aggregate
amount involved in the matters is `8.50 lakhs. The matters are currently pending.
Civil Cases
1. Reliance Life Insurance Company Limited has filed four separate civil suits before the High Court at
Bombay against Dawnay Day, Sanjay Jadhav, Rajiv Lohia and Naizi Mohammad (“Defendants”) for
recovery of amounts due to Reliance Life Insurance Company Limited from the Defendants. The matters
involve disputes relating to inter alia unsatisfactory services rendered by the service provider, breach of
contract and excess payment of remuneration. The amount involved in the matters is approximately
`765.52 lakhs. The matters are currently pending.
2. Reliance Life Insurance Company Limited has filed five civil suits before the City Civil Court, Mumbai
against four former employees namely Abhinav Chahad, Rajeev Singh, Santosh Singh and Rajendra
Bartiya (“Defendants”) for recovery of amounts due for the alleged breach of the respective employment
contracts of the Defendants. The amount involved in the matters is `2.28 lakhs. The matters are currently
pending.
3. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at
Allahabad against Insurance Ombudsman, U.P. and Uttrakhand and Vijay Kumar Gupta challenging an
award of the Insurance Ombudsman, Lucknow pertaining to computation of the premium amount. The
matter is currently pending.
4. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at
Hyderabad against Insurance Ombudsman, (A.P., Karnataka and Yanam) and M. Subhash challenging an
award dated February 7, 2010 of the Insurance Ombudsman, Hyderabad pertaining to payment of sum
assured to the nominee after the death of life assured. The amount involved in the matter is `1.00 lakhs.
The matter is currently pending.
5. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at
Chandigarh against permanent Lok Adalat, Gurgaon and Surendra Kumar challenging an award dated
336
March 21, 2011 of the permanent Lok Adalat, Gurgaon pertaining to payment of claim arising out of
health insurance. The amount involved in the matter is `2.10 lakhs. The matter is currently pending.
6. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at
Lucknow against Insurance Ombudsman, U.P and Uttarakhand and Sudhir Srivastava challenging the
award of the Insurance Ombudsman, Lucknow pertaining to claim related to Total Permanent Disability
rider in the concerned policy. The matter is currently pending.
7. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at
Guwahati against Insurance Ombudsman, Assam, Meghalaya, Mizoram, Arunachal Pradesh, Nagaland &
Tripura and Ajijul Haque challenging the award of the Insurance Ombudsman, Assam, Meghalaya,
Mizoram, Arunachal Pradesh, Nagaland & Tripura pertaining to claim related to repudiation of claim
based on suppression of material facts. The matter is currently pending.
Arbitration Proceedings
Reliance Life Insurance Company Limited has commenced arbitration proceedings before arbitrator
M.P.S. Rao against Azilon Software Solutions Limited (“Azilon”) in relation to the non-provision of
services by Azilon pursuant to a master services agreement dated July 26, 2007 entered into by Azilon with
Reliance Life Insurance Company Limited. Reliance Life Insurance Company Limited had released 30%
of the agreed services fees i.e. `9.36 lakhs under the agreement which has already been realized by Azilon.
The Bombay High Court pursuant to its order dated January 21, 2011 appointed M. P. S. Rao as a sole
arbitrator to adjudicate the matter. The amount involved in the matter is `9.36 lakhs along with `100.00
lakhs towards damages. The matter is currently pending.
8. Reliance Home Finance Limited
Cases filed against Reliance Home Finance Limited
Consumer Cases
There is 1 consumer case filed against Reliance Home Finance Limited in respect of disbursement of loan
amounts. These cases involve an amount of `0.94 lakhs and are at various stages of adjudication.
9. Indian Commodity Exchange Limited
Cases filed against Indian Commodity Exchange Limited
Civil Cases
MMTC has filed a case against Indiabulls Financial Services Limited, Reliance Exchangenext Limited and
Indian Commodity Exchange Limited. MMTC alleged that the transfer of 26% shareholding to Reliance
Exchangenext Limited by Indiabills Financial Services Limited is in breach of lock-in requirements under a
share sale and purchase agreement dated October 13, 2010 between the MMTC and Indiabulls Financial
Services Limited. MMTC has sought for declaration of transfer of shares to be void. The matter is pending
before the Company Law Board.
10. Reliance Exchangenext Limited
Cases filed against Reliance Exchangenext Limited
Civil Cases
MMTC has filed a case against Indiabulls Financial Services Limited, Reliance Exchangenext Limited and
Indian Commodity Exchange Limited. MMTC alleged that the transfer of 26% shareholding to Reliance
337
Exchangenext Limited by Indiabills Financial Services Limited is in breach of lock-in requirements under
a share sale and purchase agreement dated October 13, 2010 between the MMTC and Indiabulls Financial
Services Limited. MMTC has sought for declaration of transfer of shares to be void. The matter is pending
before the Company Law Board.
338
GOVERNMENT AND OTHER APPROVALS
On the basis of the approvals listed below, our Company can undertake this Issue and our current business
activities and other than disclosed below no further material approvals from any governmental or regulatory
authority or any other entity are required to undertake the Issue or continue our business activities. Unless
otherwise stated, these approvals are all valid as of the date of this Draft Letter of Offer.
I. Tax related and other approvals
1. Permanent Account Number AAACA4252H.
2. Tax Deduction Account Number MUMA20296D under the Income Tax Act, 1961.
3. Permits to pay the entertainment tax and additional tax on basis of return granted by the
Commercial Tax Department of relevant State Government.
4. Registration under the Central Sales Tax (Registration and Turnover) Rules, 1957 granted by the
Commercial Tax Department of relevant State Government.
5. Registration under the relevant state value added tax rules granted by the Commercial Tax
Department of relevant State Government.
II. Approvals in relation to human resources
1. Provident Fund Number MH / BAN / 45577.
2. Employee State Insurance Corporation Number 31 - 43575 – 122.
3. We have obtained the following Professional Tax Registration under the relevant state laws:
(i) State of Maharashtra (all locations): 27960001845P;
(ii) State of Gujarat (Vapi): PE2507001542;
(iii) State of Madhya Pradesh (all locations): 78271103303;
(iv) State of Andhra Pradesh (all locations, except Vizianagaram): 28405770417;
(v) State of Tamil Nadu (all locations): 08-117-PE-0034; and
(vi) West Bengal (all locations): RCE0037281.
III. Approvals in relation to the Business
Our Company is required to obtain various approvals in relation to our business. The registrations and
approvals required to be obtained by our Company usually in respect of our business in India include the
following:
Cinema Licenses
1. License for cinema issued by the Commissioner of Police of the cities where the theaters of our
Company are located.
2. License to sell tickets for admission to a cinema issued by the Commissioner of Police / Deputy
Commissioner of the cities where the theaters of our Company are located.
3. License for exhibition of cinematograph shows in theatres issued by the District Magistrate /
Deputy Commissioner of the cities where the theaters of our Company are located.
Municipality Laws
339
1. Licenses for storage of cinematograph films issued by license department of the relevant local
municipalities.
2. Licenses for establishment of cafeteria in theatres managed and operated by our Company issued
by license department of the relevant local municipalities.
3. Certificate for sanitary convenience issued by health department of the relevant local
municipalities.
4. No objection certificates for disposal of treated sewage/effluents issued by the relevant local
municipalities.
Environmental Regulations
Consents from the State Pollution Control Board to operate under the provisions of the Water (Prevention
and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981.
Labour Laws
Registration Certificate of contract labours under the Contract Labour (Registration and Abolition) Act,
1970 issued by the relevant state authorities.
Prevention of Food Adulteration Laws
License under the Prevention of Food Adulteration Act, 1954 and the Prevention of Food Adulteration
Rules, 1955 issued by the relevant state authorities.
Shops and Establishments Legislations
Registration Certificate of Establishment under the Shops and Establishment Act, 1948 as issued by the
Corporation of the cities where the theaters of our Company are located.
Fire and Emergency Service Laws
Fire license issued by the Directorate of Fire and Emergency Services under the Fire Force Act, applicable
in the states where the theatres of our Company are situated.
Certain approvals may have elapsed in their normal course and our Company has applications to the relevant
authorities for renewal of such licenses and / or approvals or is in the process of making such applications. We
undertake to obtain all approvals, licenses, registrations and permissions required to operate our business.
340
OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
The Issue has been authorised by a resolution of our Board of Directors passed at their meeting held on July 25,
2012, pursuant to Section 81 (1) of the Companies Act. The Draft Letter of Offer has been approved by the
Committee of Directors on July 28, 2012.
Our Company received in-principle approvals from the BSE and the NSE for the listing of the Equity Shares
pursuant to letters dated [●] and [●], respectively.
Prohibition by SEBI or Other Governmental Authorities
Our Company, Promoters, natural persons behind the Promoters, Directors, Promoter Group and Group Companies,
have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI
or any other regulatory or governmental authority.
The companies, with which our Promoters, Directors or persons in control of our Company are associated as
promoter, directors or persons in control have not been prohibited from accessing in capital markets under any order
or direction passed by SEBI or any other regulatory or governmental authority.
Except as provided in the table below, there has been no action taken by SEBI against any entity belonging to the
Promoter Group or forming part of Group Companies.
Sl. No. Name of Promoter Group / Group
company
Action taken by SEBI
1. Reliance Securities Limited Two show cause notices were issued by SEBI to
Reliance Securities Limited (RSL) on August 9, 2010
and August 31, 2010, alleging violation of the
provisions of the SEBI (Stock Brokers and Sub-
brokers) Regulations, 1992 in respect of certain
irregularities in operations. RSL, subsequently,
approached SEBI under the SEBI guidelines for
Consent Orders without admitting to, or denying, guilt.
The terms of consent were accepted by SEBI. The
accepted terms of consent were issued in the form of a
Consent Order on June 9, 2011. According to the
terms of the Consent Order, amongst other things, RSL
was directed to pay `25,00,000 as settlement charges
for settlement of the matter. Pursuant to the said
Consent Order, Reliance Securities Limited paid
`25,00,000 and the said proceedings stand disposed
off.
2. Reliance Equities International Private
Limited
SEBI conducted an inspection of books and records of
Reliance Equities International Private Limited
(REIPL) for the period April 1, 2008 to March 31,
2009. REIPL had submitted its responses on various
findings / comments of SEBI. Subsequently, SEBI by
its letter date August 31, 2010 directed REIPL to
rectify certain defects which it had failed to rectify.
REIPL submitted its response to SEBI on September
24, 2010 confirming the corrective steps taken.
3. Reliance Share & Stock Brokers Private Limited SEBI, vide order dated December 11, 2006 had
suspended Reliance Share & Stock Brokers Private
Limited‟s (RSSBPL) registration as stock broker for a
341
period of 4 (four) months. Thereafter, RSSBPL filed
an appeal No. 151 of 2006 with Securities Appellate
Tribunal (SAT) challenging SEBI‟s order. Meanwhile,
SEBI through its letter dated November 30, 2007 has
agreed to the consent terms proposed by RSSBPL of
settling the matter, among other things, by payment of
`50,00,000. However, the payment under the
abovementioned letter from SEBI was subject to
approval of consent terms by SAT.
SEBI vide order no. EFD / DRAIII / VRP / SS /
109671 / 2007 dated November 30, 2007 has accepted
RSSBPL consent application for a consent order
towards settlement of the dispute with them. The
dispute was settled without admitting or denying the
guilt under the consent terms proposed by RSSBPL
and as approved by the independent high power
advisory committee (HPAC) of SEBI.
4. Reliance Capital Limited SEBI had issued a letter (no. MIRSD-
4/DP/INSP/OW/10677/2010) dated July 1, 2010 to
Reliance Capital in respect of certain irregularities /
deficiencies in its depository operations.
Reliance Capital has submitted the detailed reply vide
letter dated July 20, 2010 confirming the corrective
steps taken.
5. Reliance Capital Asset Management Limited 1. SEBI on June 3, 2009 directed Reliance Capital
Asset Management Limited to withdraw one
particular advertisement pertaining to the NFO of
Reliance Infrastructure Fund of Reliance Mutual
Fund for non compliance with regulation 30(1) of
Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996.
SEBI vide order dated January 12, 2010 disposed
off the proceedings and directed Reliance Capital
Asset Management Limited to abide by the
aforesaid regulations.
2. SEBI had imposed a fine of `6,00,000 on
Reliance Mutual Fund in March 2003 for breach
of investment restrictions which was duly paid.
There has been no action taken by SEBI against our Directors or any entity our Directors are involved in as
promoters or directors.
Details of the entities that our Directors are associated with, which are engaged in securities market related business
and are registered with SEBI for the same are as follows:
Name of the Director Sujal Shah
Name of the entity Keynote Corporate Services Limited
SEBI Registration Number of the entity INM 0000 03606
If registration has elapsed, reason for non-renewal Permanent Registration
342
Details of any inquiry/investigation conducted by
SEBI at any time
Details as given below
Penalty imposed by SEBI (penalty includes
deficiency/warning letter, adjudication proceedings,
suspension/cancellation/prohibitory order
(i) Keynote Corporate Services Limited‟s
(Keynote) certificate of registration was
suspended for a period of two months pursuant
to a SEBI order dated September 26, 2003 in
relation to the matter of public issue of Maha
Chemicals Limited which opened for
subscription in April 1994. Keynote was one of
the lead managers to the said issue. The
Presiding Officer, Securities Appellate Tribunal
pursuant to his order dated October 21, 2003
stayed the order dated September 26, 2003.
Further, pursuant to a subsequent order of April
21, 2004, SAT directed Keynote not to negotiate,
accept or act upon any new assignments for two
months. The matter has been settled.
(ii) A show cause notice was issued by SEBI to
Keynote in relation to a public cum rights issue
of Majestic Industries Limited during the year
1996. In June 2009, Keynote filed consent terms
with SEBI which was further revised pursuant to
a letter dated August 7, 2009. SEBI by its order
dated February 15, 2010 approved the consent
terms. The matter has been settled.
(iii) SEBI issued a show cause notice dated January
30, 2004 to Keynote in relation to the public
issue of Consortex Karl Doelitzsch (India)
Limited (formerly known as Andhra Pradesh
Power Tools Limited). A personal hearing was
conducted on September 16, 2005. Subsequently,
a further show cause notice dated June 7, 2011
was issued by SEBI enclosing the report of the
Enquiry Officer. The Enquiry Officer in his
report had recommended to SEBI to terminate
the proceedings against Keynote as no charges
were established. Keynote has filed its reply
dated June 24, 2011 with SEBI. A personal
hearing was scheduled on September 2, 2011 and
subsequently, Keynote has on April 13, 2012,
filed its consent terms.
(iv) SEBI has issued a show cause notice dated
September 9, 2008 to Keynote in relation to the
public issue of Nissan Copper Limited. Consent
terms dated December 8, 2008 were filed by
Keynote Corporate Services Limited with SEBI.
SEBI by its order dated April 9, 2009 approved
the consent terms. The matter has been settled.
(v) A show cause notice dated May 20, 2011 was
issued by SEBI to Keynote Corporate Services
Limited in relation to a public issue of Emmbi
343
Polyarns Limited dealt with during the year
2010. Keynote has filed its reply dated July 12,
2011. Subsequently, on October 10, 2011 a
personal hearing was granted. The matter is
currently pending.
(vi) SEBI has passed an order dated January 31, 2012
against Keynote imposing a penalty of ` 10 lakhs
in relation to the public issue of Edserve
Softsystems Limited. Keynote has filed an
appeal to the SAT on March 13, 2012. The
matter is pending.
Outstanding fee payable to SEBI by the entity, if any Nil
IRDA Penalties
Except as provided in the table below, there has been no penalty imposed by the IRDA against any entity belonging
to the Promoter Group or forming part of Group Companies.
Sl. No. Name of Promoter Group
/ Group company
Details Paid on Penalty imposed
3. Reliance General Insurance
Company Limited
Co-insurer – Breach by
lender
May 29, 2006 1,000
Co-insurer – Breach by
lender
August 28, 2006 1,000
Co-insurer- Breach by
lender
August 28, 2006 1,000
Predatory Pricing December 5, 2006 50,00,000
Breach of File & Use
Guidelines (Health wise
policy)
July 28, 2009 20,00,000
4. Reliance Life Insurance
Company Limited
Payment of excess referral
fees than envisaged in the
referral guidelines and
deviation in the File & Use
procedure particularly in
group products in violation
of circular IRDA/Cir. No.
01/IRDA/ACTL/MC/2006-
07 dated 12/7/2006
August 12, 2010 10,00,000
Prohibition by RBI
Neither our Company nor its Promoters, Directors, Group Companies or relatives (as per the Companies Act) of our
Promoters are identified as willful defaulters by the RBI or any other governmental authority. There are no
violations of securities laws committed by them in the past or are pending against them.
Eligibility for the Issue
Our Company is a listed company and has been incorporated under the Companies Act. Our Equity Shares are
presently listed on the Stock Exchanges. It is eligible to offer this issue in terms of Chapter IV of the ICDR
Regulations. It is eligible to offer the Issue in terms of Chapter IV of the ICDR Regulations.
Please note that our Company has undergone a change of control consequent to an acquisition of its majority stake
344
by the Reliance Group in June 2005 in accordance with the Takeover Regulations and is making a rights issue of its
securities for the first time subsequent to such change of control in accordance with clause (3)(a) of Part E of
Schedule VIII of ICDR Regulation. Therefore, the disclosures in the DLOF have been made in accordance with Part
A of Schedule VIII of the ICDR Regulations, except for disclosures as specified in clause (4) of Part E of Schedule
VIII of the ICDR Regulations.
DISCLAIMER CLAUSE OF SEBI
AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT
IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS DRAFT LETTER OF
OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS
BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER
FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE
IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR
OPINIONS EXPRESSED IN THIS DRAFT LETTER OF OFFER. THE LEAD MANAGER, AXIS
CAPITALLIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THIS DRAFT LETTER
OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME
BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED
DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL
RELEVANT INFORMATION IN THIS DRAFT LETTER OF OFFER, THE LEAD MANAGER IS
EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS
RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD
MANAGER, AXIS CAPITAL LIMITED WILL FURNISH TO SEBI A DUE DILIGENCE CERTIFICATE
WHICH WILL READ AS FOLLOWS:
(1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE
FINALISATION OF THIS DRAFT LETTER OF OFFER PERTAINING TO THE ISSUE;
(2) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY,
OUR DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT
VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE,
PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS
FURNISHED BY THE COMPANY, WE CONFIRM THAT:
(a) THIS DRAFT LETTER OF OFFER FILED WITH THE BOARD IS IN CONFORMITY
WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
(b) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE
REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE
BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT
AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
(c) THE DISCLOSURES MADE IN THIS DRAFT LETTER OF OFFER ARE TRUE, FAIR
AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED
DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH
DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE
COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009
AND OTHER APPLICABLE LEGAL REQUIREMENTS.
345
(3) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THIS
DRAFT LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE
SUCH REGISTRATION IS VALID.
(4) WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS
TO FULFIL THEIR UNDERWRITING COMMITMENTS – NOT APPLICABLE
(5) WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR
INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS‟
CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO
FORM PART OF PROMOTERS‟ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE
DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE PERIOD
STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING
PROSPECTUS/DRAFT PROSPECTUS WITH THE BOARD TILL THE DATE OF
COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING
PROSPECTUS/DRAFT PROSPECTUS – NOT APPLICABLE
(6) WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF
PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE
DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE
IN THE DRAFT RED HERRING PROSPECTUS/DRAFT PROSPECTUS – NOT APPLICABLE
(7) WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND
(D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS
HAVE BEEN MADE TO ENSURE THAT PROMOTERS‟ CONTRIBUTION SHALL BE
RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE
THAT AUDITORS‟ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE
BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO
ENSURE THAT PROMOTERS‟ CONTRIBUTION SHALL BE KEPT IN AN ESCROW
ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO
THE ISSUER ALONG WITH THE PROCEEDS Of THE PUBLIC ISSUE – NOT APPLICABLE
(8) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE „MAIN OBJECTS‟
LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER
CHARTER OF THE COMPANY AND THAT THE ACTIVITIES WHICH HAVE BEEN
CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS
MEMORANDUM OF ASSOCIATION.
(9) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE
BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE
COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID
BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES
MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM THAT THE
AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER
SPECIFICALLY CONTAINS THIS CONDITION - NOTED FOR COMPLIANCE
346
(10) WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THIS DRAFT LETTER OF OFFER
THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT
OR PHYSICAL MODE.
(11) WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO
DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE
INVESTOR TO MAKE A WELL INFORMED DECISION.
(12) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THIS DRAFT
LETTER OF OFFER:
(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE
SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE
COMPANY AND
(b) AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM
TIME TO TIME.
(13) WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO
ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE
MAKING THE ISSUE.
(14) WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN
EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR
THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK
FACTORS, PROMOTERS EXPERIENCE, ETC.
(15) WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH
THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS
OF COMPLIANCE, PAGE NUMBER OF THIS DRAFT LETTER OF OFFER WHERE THE
REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
(16) WE ENCLOSE STATEMENT ON „PRICE INFORMATION OF PAST ISSUES HANDLED BY
MERCHANT BANKERS (WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)‟, AS PER
FORMAT SPECIFIED BY THE BOARD THROUGH CIRCULAR - NOT APPLICABLE
(17) WE CERTIFY THAT PROFITS FROM RELATED PARTY TRANSACTIONS HAVE ARISEN
FROM LEGITIMATE BUSINESS TRANSACTIONS.
THE FILING OF THIS DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY
FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR FROM
THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCE AS MAY BE
REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO
TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER ANY IRREGULARITIES OR LAPSES
IN THIS DRAFT LETTER OF OFFER.
Caution
Disclaimer clauses from our Company and the Lead Manager
347
Our Company and the Lead Manager accept no responsibility for statements made otherwise than in this Draft Letter
of Offer or in any advertisement or other material issued by our Company or by any other persons at the instance of
our Company and anyone placing reliance on any other source of information would be doing so at his own risk.
The Lead Manager and our Company shall make all information available to the Equity Shareholders and no
selective or additional information would be available for a section of the Equity Shareholders in any manner
whatsoever including at presentations, in research or sales reports etc. after filing of this Draft Letter of Offer with
SEBI.
No dealer, salesperson or other person is authorised to give any information or to represent anything not contained in
this document. You must not rely on any unauthorised information or representations. This Draft Letter of Offer is
an offer to sell only the Equity Shares and rights to purchase the Equity Shares offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information contained in this Draft Letter of Offer
is current only as of its date.
Investors who invest in the Issue will be deemed to have represented to our Company and Lead Manager and their
respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws,
rules, regulations, guidelines and approvals to acquire Equity Shares, and are relying on independent advice /
evaluation as to their ability and quantum of investment in the Issue.
Disclaimer with respect to jurisdiction
This Draft Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and
regulations thereunder. Any disputes arising out of the Issue will be subject to the jurisdiction of the appropriate
court(s) in Mumbai, India only.
Designated Stock Exchange
The Designated Stock Exchange for the purpose of the Issue will be [●].
Disclaimer Clause of the BSE
As required, a copy of this Draft Letter of Offer has been submitted to the BSE. The Disclaimer Clause as intimated
by the BSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing
with the Stock Exchanges.
Disclaimer Clause of the NSE
As required, a copy of this Draft Letter of Offer has been submitted to the NSE. The Disclaimer Clause as intimated
by the NSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing
with the Stock Exchanges.
Selling Restrictions
The distribution of this Draft Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain
jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into
whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such
restrictions. Our Company is making the Issue of Equity Shares on a rights basis to the Equity Shareholders of our
Company and will dispatch the Letter of Offer and CAFs only to Equity Shareholders who have provided an Indian
address.
No action has been or will be taken to permit the a public offering of the Equity Shares or Rights Entitlement to
occur in any jurisdiction, or the possession, circulation, or distribution of this Draft Letter of Offer or any other
material relating to our Company, the Equity Shares or Rights Entitlement in any jurisdiction, where action would
348
be required for that purpose, except that this Draft Letter of Offer has been filed with SEBI.
Accordingly, the Equity Shares and Rights Entitlement may not be offered or sold, directly or indirectly, and none of
this Draft Letter of Offer or any offering materials or advertisements in connection with the Equity Shares or Rights
Entitlement may be distributed or published in any jurisdiction, except in accordance with legal requirements
applicable in such jurisdiction. Receipt of this Draft Letter of Offer will not constitute an offer in those jurisdictions
in which it would be illegal to make such an offer.
This Draft Letter of Offer and its accompanying documents are being supplied to you solely for your
information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other
person or published, in whole or in part, for any purpose.
If this Draft Letter of Offer is received by any person in any jurisdiction where to do so would or might contravene
local securities laws or regulation, or by their agent or nominee, they must not seek to subscribe to the Equity Shares
or the Rights Entitlement referred to in this Draft Letter of Offer. Investors are advised to consult their legal counsel
prior to accepting any provisional allotment of Equity Shares, applying for excess Equity Shares or Rights
Entitlement or making any offer, sale, resale, pledge or other transfer of the Equity Shares or Rights Entitlement.
Neither the delivery of this Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any
implication that there has been no change in our Company‟s affairs from the date hereof or that the information
contained herein is correct as of any time subsequent to this date.
Each person who exercises Rights Entitlement and subscribes for Equity Shares or excess Equity Shares, or who
purchases Rights Entitlement or Equity Shares shall do so in accordance with the restrictions set out below.
United States Restrictions
The Rights Entitlement and the Equity Shares have not been, and will not be, registered under the Securities Act or
under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold,
allotted, taken up, exercised, renounced, pledged, transferred or delivered, directly or indirectly, within the United
States (as defined in Regulation S). The Issue to which this Draft Letter of Offer relates is not, and under no
circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlement for sale in the United
States or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlement. Accordingly,
this Draft Letter of Offer and the CAF should not be forwarded to or transmitted in or into the United States at any
time. Any person who acquires Rights Entitlements or Equity Shares will be deemed to have declared, warranted
and agreed, by accepting the delivery of this Draft Letter of Offer, that it is not and that at the time of subscribing for
the Equity Shares or the Rights Entitlements, it will not be, in the United States and is not a U.S. person (as defined
in Regulation S).
The Rights Entitlement and the Equity Shares have not been approved or disapproved by the U.S. Securities and
Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority,
nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Rights
Entitlement, the Equity Shares or the accuracy or adequacy of this Draft Letter of Offer. Any representation to the
contrary is a criminal offence in the United States.
Neither our Company nor any person acting on behalf of our Company will accept a subscription or renunciation
from any person, or the agent of any person, who appears to be, or who our Company or any person acting on behalf
of our Company has reason to believe is, in the United States. Any envelope containing a CAF and postmarked from
the United States will not be accepted. Similarly, any CAF in which the exercising holder or subscribing applicant
requests Equity Shares to be issued in registered form or credited to a securities account and gives an address in the
United States will not be accepted. Our Company reserves the right to treat as invalid any CAF which: (i) appears to
our Company or its agents to have been executed in or dispatched from the United States; (ii) does not include the
relevant certifications; or (iii) where our Company believes acceptance of such CAF may infringe applicable legal or
regulatory requirements; and our Company shall not be bound to allot or issue any Equity Shares or Rights
Entitlement in respect of any such CAF. Any payment made in respect of any CAF that does not meet the foregoing
349
criteria will be returned without interest. Any person in the United States who obtains a copy of this Draft Letter of
Offer or its accompanying documents is required to disregard it.
Until the expiration of the 40 day period beginning on the date on which our Company will allot and issue the
Equity Shares, an offer to sell or a sale of, or subscription for, the Rights Entitlement or the Equity Shares within the
United States by a broker / dealer (whether or not it is participating in the Issue) may violate the registration
requirements of the Securities Act.
Each purchaser of the Rights Entitlement and / or the Equity Shares will be deemed to have represented and agreed
as follows (terms defined in Regulation S have the same meanings when used herein):
(a) the purchaser (i) is, and the person, if any, for whose account it is acquiring such Rights Entitlement and/or
the Equity Shares is, outside the United States, and (ii) is acquiring the Rights Entitlement and/or the
Equity Shares in an offshore transaction meeting the requirements of Regulation S;
(b) the purchaser is aware that the Rights Entitlement and the Equity Shares have not been and will not be
registered under the Securities Act and are being distributed and offered outside the United States in
reliance on Regulation S; and
(c) the purchaser acknowledges that our Company, the Lead Manager, their affiliates and others will rely upon
the truth and accuracy of the foregoing representations and agreements.
European Economic Area Restrictions
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive
(each, “Relevant Member State”), an offer of the Equity Shares to the public may not be made in that Relevant
Member State prior to the publication of a prospectus in relation to the Rights Entitlement or the Equity Shares
which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved
in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that an offer of Equity Shares or Rights Entitlement to the public
in that Relevant Member State from and including the Relevant Implementation Date may be made:
(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised
or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last
Financial Year; (2) a total balance sheet of more than Euro 43,000,000 and (3) an annual net turnover of
more than Euro 50,000,000, as shown in its last annual or consolidated accounts; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of Equity Shares shall result in the requirement for the publication by our Company or
the Lead Manager pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any Equity Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the
terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe
the Equity Shares, as the same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/7 1/EC and
includes any relevant implementing measure in each Relevant Member State.
In the case of any Rights Entitlement or Equity Shares being offered to a financial intermediary as that term is used
in Article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to have represented,
acknowledged and agreed that the Rights Entitlement or Equity Shares acquired by them in the Issue have not been
acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale
350
to, persons in circumstances which may give rise to an offer of any Rights Entitlement or Equity Shares acquired by
them in the Issue to the public other than their offer or resale in a Relevant Member State to qualified investors as so
defined who are not financial intermediaries or in circumstances in which the prior consent of the Lead Manager has
been obtained to each such proposed offer or resale.
United Kingdom Restrictions
This Draft Letter of Offer is only being distributed to and is only directed at (i) persons who are outside the UK, or
(ii) in circumstances where Section 21(1) of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2005 does not apply.
Filing
This Draft Letter of Offer has been filed with the Corporation Finance Department of the SEBI, located at SEBI
Bhavan, C-4-A, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051, India for its observations. After
SEBI gives its observations, the final Letter of Offer will be filed with the Designated Stock Exchange as per the
provisions of the Companies Act.
Listing
Our Company will issue and dispatch Allotment advice/ share certificates/demat credit and/or letters of regret along
with refund order or credit the Allotted Equity Shares to the respective beneficiary accounts, if any, within a period
of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company
becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock
Exchange(s), whichever is earlier) our Company and every Director of our Company who is an officer in default
shall, on and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed
under Section 73 of the Companies Act.
Consents
Consents in writing of our Directors, the Auditors, the Lead Manager, the Legal Counsel, the Registrar to the Issue,
lenders and experts to act in their respective capacities have been obtained and such consents have not been
withdrawn up to the date of this Draft Letter of Offer. B S R & Co. and Chaturvedi & Shah, Chartered Accountants,
the Auditors of our Company, have given their written consent for the inclusion of their report in the form and
content in which it appears in this Draft Letter of Offer and such consent and report have not been withdrawn up to
the date of this Draft Letter of Offer. Jitendra Sanghavi & Co., Chartered Accountants have given their written
consent for the inclusion of the statement of tax benefits dated February 26, 2013 in the form and content in which it
appears in this Draft Letter of Offer. Furthermore, Sandeep S. Shah and Associates, Chartered Accountants have
given their written consent for the inclusion of their name and the certificate dated March 8, 2013 in respect of
unsecured loans availed by our Company from Reliance Capital Limited which are proposed to be repaid and/or
prepaid out of the Net Proceeds, in the form and content in which it appears in this Draft Letter of Offer.
Expert Opinion
Except for:
the report of our Auditors dated March 11, 2013 in the form and context it appears in this Draft Letter of Offer;
and
the report on the statement of tax benefits dated February 26, 2013 received from Jitendra Sanghavi & Co.,
Chartered Accountants, in the form and context in which it appears in this Draft Letter of Offer,
we have not obtained any other expert opinion in relation to this issue.
Issue related expenses
351
The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses,
advertisement expenses, and registrar. The estimated Issue related expenses are as follows:
Activity Expense
(` in
lakhs)
Expense (% of total
expenses)
Expense (% of
Issue Size)
Fee to the Lead Manager [●] [●] [●]
Fee to the Registrar to the Issue [●] [●] [●]
Fee to the Monitoring Agency and Legal Advisors [●] [●] [●]
Others (SEBI Fees, Stock Exchange Fees, Printing,
Stationery and Postage, Advertisement, etc.)
[●] [●] [●]
Total estimated Issue expenses [●] [●] [●]
Previous Issues by our Company
Our Company has not undertaken any public or rights issue during the last five years.
Previous issues of Equity Shares otherwise than for cash
Except as disclosed in the chapter entitled “Capital Structure” at page 70, our Company has not issued any Equity
Shares for consideration otherwise than for cash.
Commission and Brokerage paid on previous issues of the Equity Shares
Our Company had undertaken an initial public offer in Fiscal 2001. The commission and brokerage paid in relation
to the initial public offer was `191.09 lakhs.
Previous capital issue during the previous three years by listed Subsidiaries, Group Companies and associates
of our Company
Except as disclosed in this Draft Letter of Offer, none of our Subsidiaries, Group Companies and associates of our
Company are listed on any stock exchange.
Reliance Broadcast Network Limited, a listed Group Company, has not made any public or rights issue in the last
three years.
Performance vis-à-vis objects – Public / Rights Issue of our Company and/or listed Subsidiaries, Group
Companies and associates of our Company
Our Company has not undertaken any public or rights issue during the last 10 years immediately preceding the date
of this Draft Letter of Offer.
Except as disclosed in this Draft Letter of Offer, none of our Group Companies, our Subsidiaries and associates of
our Company are listed on any stock exchange.
Reliance Broadcast Network Limited has not made any public or rights issue in the last ten years.
Outstanding Debentures/Bonds and Preference Shares
Our Company has issued:
3,500 11.00% secured redeemable non-convertible debentures of `10,00,000 each which are currently
outstanding;
352
440 12.50% unsecured redeemable non-convertible debentures of `10,00,000 each of which 330 are
currently outstanding; and
29,50,000 10.00% redeemable non-convertible preference shares of `5 each which are currently
outstanding.
Option to Subscribe
Other than as disclosed in the chapter entitled “Capital Structure” at page 70, our Company has not given any
person any option to subscribe for the Equity Shares.
Investor Grievances and Redressal System
Our Company has adequate arrangements for the redressal of investor complaints in compliance with the corporate
governance requirements under the Listing Agreements. The Shareholders and Investors‟ Grievance Committee
currently comprises Gautam Doshi, Amit Khanna and Prasoon Joshi and its broad terms of reference include
investigation into any matter relating to redressing shareholders‟ and/or investors‟ complaints pertaining to transfer
of shares, non-receipt of balance sheet, non-receipt of declared dividend, duplicate share certificates and
dematerialization or rematerialization of shares.
Status of Complaints
(a) Total number of complaints received during Fiscal 2010: 19
(b) Total number of complaints received during Fiscal 2011: 37
(c) Total number of complaints received during Fiscal 2012 : 27
(d) Time normally taken for disposal of various types of investor complaints: Not more than five days.
Status of outstanding investor complaints in relation to our Company
As of date of this Draft Letter of Offer, there were no outstanding investor complaints.
Status of outstanding investor complaints in relation to the listed Group Companies
In relation to the Reliance Broadcast Network Limited, there were no outstanding investor complaints as on January
31, 2013.
Investor Grievances arising out of the Issue
Our Company‟s investor grievances arising out of the Issue will be handled by Link Intime India Private Limited,
who is the Registrar to the Issue. The Registrar will have a separate team of personnel handling only post-Issue
correspondence.
The agreement between our Company and the Registrar will provide for retention of records with the Registrar for a
period of at least one year from the last date of dispatch of Allotment Advice/ share certificate / demat credit / refund
order to enable the Registrar to redress grievances of Investors.
All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA
applicants giving full details such as folio no., name and address, contact telephone / cell numbers, email i.d. of the
first applicant, number and type of shares applied for, Application Form serial number, amount paid on application
and the name of the bank and the branch where the application was deposited, along with a photocopy of the
acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished.
The average time taken by the Registrar for attending to routine grievances will be 7-10 days from the date of
receipt of complaints. In case of non-routine grievances where verification at other agencies is involved, it would be
the endeavour of the Registrar to attend to them as expeditiously as possible. Our Company undertakes to resolve
the Investor grievances in a time bound manner.
353
Registrar to the Issue
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Telephone: +91 22 2596 7878
Toll-free: 1-800-22-0878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR 0000 04058
Investors may contact the Compliance Officer in case of any pre-Issue / post -Issue related problems such as
non-receipt of Allotment advice/share certificates/ demat credit / refund orders etc. The contact details of the
Compliance Officer are as follows:
Ashish Agarwal
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
Mumbai 400 065
Maharashtra, India
Tel: +91 22 3980 8900
Facsimile: +91 22 3980 8985
Email: [email protected]
Changes in Auditors during the last three years
Chaturvedi & Shah, Chartered Accountants were appointed as one of joint auditors on September 30, 2009.
Capitalization of Reserves or Profits
Other than as disclosed in the chapter entitled “Capital Structure” of this Draft Letter of Offer, our Company has not
capitalized any of its reserves or profits in the last five years.
Revaluation of Fixed Assets
Except as stated in the chapter entitiled “Financial Statements” at page F1, there has been no revaluation of our
Company‟s fixed assets in the last five years.
Minimum Subscription
If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below
90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of applications, our
Company shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there
is delay in the refund of the subscription amount by more than eight days after our Company becomes liable to pay
the subscription amount (i.e., 15 days after the Issue Closing Date), our Company and every Director of our
Company who is an officer in default shall be jointly and severally liable to pay interest for the delayed period, as
prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act.
354
SECTION VII: ISSUE INFORMATION
TERMS OF THE ISSUE
The Equity Shares proposed to be issued on a rights basis, are subject to the terms and conditions contained in this
Draft Letter of Offer, the enclosed CAF, the Memorandum of Association and Articles of Association of our
Company, and the provisions of the Companies Act, FEMA, the guidelines and regulations issued by SEBI,
approvals, if any, received from the RBI and other governmental authorities, the guidelines, notifications and
regulations for the issue of capital and for listing of securities issued by GoI and other statutory and regulatory
authorities from time to time, terms and conditions as stipulated in the allotment advice or security certificate.
Please note that QIB and Non Institutional applicants and other applicants whose application amount exceeds
`2,00,000 can participate in the Issue only through the ASBA process. Equity Shareholders of our Company who
are not QIBs and Non Institutional applicants and whose application amount is not more than `2,00,000 can
participate in the Issue through the ASBA process as well as the non ASBA process. ASBA Investors should note that
the ASBA process involves application procedures that may be different from the procedure applicable to non ASBA
process. ASBA Investors should carefully read the provisions applicable to such applications before making their
application through the ASBA process. For details, please see parts entitled “Procedure for Application through the
Applications Supported by Blocked Amount (“ASBA”) Process” in this chapter.
Basis for the issue
The Equity Shares are being offered for subscription for cash to the existing Equity Shareholders whose names
appear as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity Shares held in
the electronic form and on the statutory register of members of our Company in respect of the Equity Shares held in
physical form at the close of business hours on the Record Date, being [●] as intimated to the Designated Stock
Exchange.
Rights Entitlement
Eligible Equity Shareholder whose name appears as a beneficial owner in respect of the Equity Shares held in the
electronic form or appears in the register of members as an Equity Shareholder of our Company as on the Record
Date, i.e., [●], you are entitled to the number of Equity Shares as set out in Part A of the enclosed CAF.
THE DISTRIBUTION OF THE LETTER OF OFFER AND THE ISSUE OF EQUITY SHARES ON A
RIGHTS BASIS TO PERSONS IN CERTAIN JURISDICTIONS OUTSIDE INDIA MAY BE
RESTRICTED BY LEGAL REQUIREMENTS PREVAILING IN THOSE JURISDICTIONS. OUR
COMPANY IS MAKING THE ISSUE OF EQUITY SHARES ON A RIGHTS BASIS TO THE EQUITY
SHAREHOLDERS AND THE LETTER OF OFFER, ABRIDGED LETTER OF OFFER AND THE CAFS
WILL BE DISPATCHED ONLY TO THOSE EQUITY SHAREHOLDERS WHO HAVE A REGISTERED
ADDRESS IN INDIA. ANY PERSON WHO ACQUIRES RIGHTS ENTITLEMENTS OR EQUITY
SHARES WILL BE DEEMED TO HAVE DECLARED, WARRANTED AND AGREED, BY ACCEPTING
THE DELIVERY OF THE LETTER OF OFFER, THAT IT IS NOT AND THAT AT THE TIME OF
SUBSCRIBING FOR THE EQUITY SHARES OR THE RIGHTS ENTITLEMENTS, IT WILL NOT BE, IN
THE UNITED STATES. PERSONS WHO MAY ACQUIRE RIGHTS ENTITLEMENTS OR COME INTO
POSSESSION OF THIS DRAFT LETTER OF OFFER OR CAF ARE ADVISED TO CONSULT WITH
THEIR OWN LEGAL ADVISORS AS TO WHAT RESTRICTIONS MAY BE APPLICABLE TO THEM
AND TO OBSERVE SUCH RESTRICTIONS. THIS DRAFT LETTER OF OFFER MAY NOT BE USED
FOR THE PURPOSE OF AN OFFER OR INVITATION IN ANY CIRCUMSTANCES TO SUBSCRIBE TO
355
EQUITY SHARES IN WHICH SUCH ODDER OR INVITATION IS NOT AUTHORIZED. NO ACTION
HAS BEEN TAKEN OR WILL BE TAKEN THAT WOULD PERMIT THE OFFERING OF THE EQUITY
SHARES PURSUANT TO THE ISSUE TO OCCUR IN ANY JURISDICTION OTHER THAN INIDA, OR
THE POSSESSION, CIRCULATION OR DISTRIBUTION OF THIS DRAFT LETTER OF OFFER
RELATING TO THE COMPANY OR THE EQUITY SHARES IN ANY JURISDICTION WHERE
ACTION FOR SUCH PURPOSE IS REQUIRED. ACCORDINGLY, THE EQUITY SHARES MAY NOT
BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, AND THIS DRAFT LETTER OF OFFER MAY
NOT BE DISTRIBUTED OR PUBLISHED IN OR FROM ANY COUNTRY OR JURISDICTION EXCEPT
UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE
RULES AND REGUMALATIONS OF ANY SUCH COUNTRY OR JURISDICTION.
PRINCIPAL TERMS OF THE EQUITY SHARES
Face Value
Each Equity Share will have the face value of `5/-.
Issue Price
Each Equity Share shall be offered at an Issue Price of `[●] for cash at a premium of `[●] per Equity Share. The
Issue Price has been arrived at after consultation between our Company and the Lead Manager.
Rights Entitlement Ratio
The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of [●] Equity
Shares for every [●] Equity Shares held on the Record Date.
Terms of Payment
The full amount of `[●] per Equity Share is payable on application.
Reliance Capital Limited through its letter dated March 8, 2013 has consented to adjust the RCL Loan towards share
application money against their Rights Entitlements and additional subscription, if any. Consequently no fresh Issue
proceeds would be received by our Company to such an extent.
A separate cheque/demand draft pay order must accompany each Application form.
Pursuant to RBI Circular number DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the
Stockinvest scheme has been withdrawn and accordingly, payment through Stockinvest will not be accepted in the
Issue.
Fractional Entitlements
For Equity Shares being offered on a rights basis under this Issue, if the shareholding of any of the Eligible Equity
Shareholders is less than [●] Equity Shares or not in the multiple of [●], the fractional entitlement of such Eligible
Equity Shareholders shall be ignored. Eligible Equity Shareholders whose fractional Rights Entitlements are being
ignored would be given preferential consideration for the Allotment of one additional Equity Share each if they
apply for additional Equity Shares over and above their Rights Entitlement, if any.
356
For example, if an Eligible Equity Shareholder holds between [●] and [●] Equity Shares, he will be entitled to [●]
Equity Shares on a rights basis. He will also be given a preferential consideration for the Allotment of one additional
Equity Share if he has applied for the same.
Those Eligible Equity Shareholders holding less than [●] Equity Shares will therefore be entitled to zero Equity
Shares under this Issue and shall be despatched a CAF with zero entitlement. Such Eligible Equity Shareholders are
entitled to apply for additional Equity Shares. However, they cannot renounce the same in favour of third parties.
CAFs with zero entitlement will be non-negotiable / non-renounceable.
For example, if an Eligible Equity Shareholder holds between one and [●] Equity Shares, he will be entitled to zero
Equity Shares on a rights basis. He will be given a preference for Allotment of [●] additional Equity Share if he has
applied for the same.
Ranking
The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of
Association. The Equity Shares allotted in the Issue shall rank pari passu with our existing Equity Shares in all
respects, including in respect of right to receive dividend.
Listing and trading of Equity Shares proposed to be issued
Our Company‟s existing Equity Shares are currently listed and traded on the Stock Exchanges under the ISIN
INE540B01015. The fully paid up Equity Shares proposed to be issued on a rights basis shall be listed and admitted
for trading on the Stock Exchanges under the existing ISIN for fully paid up Equity Shares of our Company.
The listing and trading of the Equity Shares shall be based on the current regulatory framework applicable thereto.
Accordingly, any change in the regulatory regime would affect the listing and trading schedule.
The Equity Shares allotted pursuant to this Issue will be listed as soon as practicable and all steps for completion of
the necessary formalities for listing and commencement of trading shall be taken within seven Working Days of
finalisation of the basis of allotment. Our Company has made an application for “in-principle” approval for listing of
the Equity Shares to the BSE and the NSE through letters dated [●] and [●], respectively and has received such
approval from the BSE pursuant to the letter no. [●] dated [●] and from the NSE pursuant to letter no. [●] dated [●].
Rights of the Eligible Equity Shareholder
Subject to applicable laws, the Eligible Equity Shareholders of our Company shall have the following rights:
Right to receive dividend, if declared;
Right to attend general meetings and exercise voting powers, unless prohibited by law;
Right to vote in person or by proxy;
Right to receive offers for rights shares and be allotted bonus shares, if announced;
Right to receive surplus on liquidation;
Right to free transferability of Equity Shares; and
Such other rights as may be available to a shareholder of a listed public company under the Companies
Act and Memorandum of Association and Articles of Association.
357
General Terms of the Issue
Market Lot
The Equity Shares of our Company are tradable only in dematerialized form. The market lot for Equity Shares in
dematerialised mode is one. In case an Eligible Equity Shareholder holds Equity Shares in physical form, our
Company would issue to the allottees one certificate for the Equity Shares allotted to each folio (“Consolidated
Certificate”).
Joint Holders
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the
same as joint tenants with the benefit of survivorship subject to the provisions contained in the Articles of
Association.
Nomination
Nomination facility is available in respect of the Equity Shares in accordance with the provisions of the Section
109A of the Companies Act. An Eligible Equity Shareholder can nominate any person by filling the relevant details
in the CAF in the space provided for this purpose.
In case of Eligible Equity Shareholders who are individuals, a sole Eligible Equity Shareholder or first Eligible
Equity Shareholder, along with other joint Eligible Equity Shareholders being individual(s) may nominate any
person(s) who, in the event of the death of the sole holder or all the joint holders, as the case may be, shall become
entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the
death of the original Eligible Equity Shareholder(s), shall be entitled to the same advantages to which he would be
entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Eligible Equity
Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to
the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall
stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a
fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee
shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made
only in the prescribed form available on request at the registered office of the Company or such other person at such
addresses as may be notified by the Company. The Applicant can make the nomination by filling in the relevant
portion of the CAF.
Only one nomination would be applicable for one folio. Hence, in case the Investor(s) has already registered the
nomination with our Company, no further nomination needs to be made for Equity Shares that may be allotted in
this Issue under the same folio.
In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate
nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective
Depositary Participant (“DP”) of the Investor would prevail. Any Investor desirous of changing the existing
nomination is requested to inform its respective DP.
Notices
358
All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English
language national daily newspaper, one Hindi language national daily newspaper and one regional language daily
newspaper with wide circulation in Maharashtra and / or, will be sent by post to the registered address of the Equity
Shareholders in India or the Indian address provided by the Equity Shareholders from time to time.
Additional Subscription by our Promoters and members of our Promoter Gorup
Our Promoters have, through the Subscription Letter, jointly and severally, undertaken to (i) apply for Equity Shares
being offered to them pursuant to the Issue to the extent of their Rights Entitlement; (ii) apply directly or through
our Company‟s Promoter Group for any Equity Shares renounced in their favour; and (iii) apply directly or through
the Company‟s Promoter Group for any additional Equity Shares in the Rights Issue only to the extent of any
unsubscribed portion of the Rights Issue, subject to applicable law, to ensure that at least 90% of the Rights Issue is
subscribed.
As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance
with the paragraph above, the Promoters may acquire Equity Shares over and above their Rights Entitlement which
may result in an increase in their shareholding, individually and / or collectively, above their current shareholding.
Any such subscription and acquisition of Equity Shares by the Promoters in the Rights Issue will not result in
change of control of the management of the Company in accordance with Regulation 3 (2) and Regulation 3(3) of
the Takeover Regulations and shall be exempt in terms of Regulation 10 (4) (a) and (b) of the Takeover Code.
Further, such subscription to additional Equity Shares by the Promoters beyond their Rights Entitlement will be in
accordance with the provisions of Regulation 10(4) (b) of the Takeover Regulations. As such, other than meeting the
requirements indicated in the chapter entitled “Objects of the Issue” at page 84, there is no other intention / purpose
for the Issue, including any intention to delist our Equity Shares, even if, as a result of any Allotment in the Issue to
our Promoter(s) and / or the members of our Promoter Group, the shareholding of our Promoters and/or Promoter
Group in our Company exceeds their current shareholding.
However, such participation will not result in breach of minimum public shareholding requirement stipulated under
Clause 40A of the equity Listing Agreement entered into between us and the Stock Exchanges.
For details, please see the part entitled “Basis of Allotment” at page 377.
Procedure for Application
The CAF for Equity Shares would be printed in black ink for all the Eligible Equity Shareholders. In case the
original CAFs are not received by the Eligible Equity Shareholder or is misplaced by the Eligible Equity
Shareholder, the Eligible Equity Shareholder may request the Registrar to the Issue, for issue of a duplicate CAF, by
furnishing the registered folio number, DP ID, Client ID and their full name and address. In case the signature of the
Investor(s) does not match with the specimen registered with our Company, the application is liable to be rejected.
Please note that neither our Company nor the Registrar to the Issue shall be responsible for delay in the receipt of the
CAF/duplicate CAF attributable to postal delays or if the CAF/duplicate CAF are misplaced in the transit. The
request for a duplicate CAF should reach the Registrar to the Issue within seven days from the Issue Opening Date.
Investors should note that those who are making the Application in such duplicate CAF should not utilize the
original CAF for any purpose, including renunciation, even if the original CAF is received or found subsequently. If
any Investor violates any of these requirements, they shall face the risk of rejection of both Applications.
359
Please note that QIB and Non Institutional applicants and other applicants whose application amount exceeds
`2,00,000 can participate in the Issue only through the ASBA process. Eligible Equity Shareholders of our Company
who are not QIBs and Non Institutional applicants and whose application amount is not more than `2,00,000 can
participate in the Issue through the ASBA process as well as the non-ASBA process.
Acceptance of the Issue
You may accept the offer to participate and apply for the Equity Shares offered, either in full or in part, by filling
Part A of the enclosed CAFs and submit the same along with the application money payable to the Bankers to the
Issue or any of the collection branches as mentioned on the reverse of the CAFs before the close of the banking
hours on or before the Issue Closing Date or such extended time as may be specified by our Board of Directors in
this regard. Investors at centres not covered by the branches of collecting banks can send their CAFs together with
the cheque drawn at par on a local bank at Mumbai/demand draft payable at Mumbai to the Registrar to the Issue by
registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. For
further details on the mode of payment, please see the parts entitled “Mode of Payment for Resident Eligible Equity
Shareholders/Investors” and “Mode of Payment for Non-Resident Eligible Equity Shareholders/Investors” at pages
365 and 366, respectively. Investors may also choose to accept the offer to participate in the Issue by plain-paper
Applications.
CAF
The Registrar to the Issue will dispatch the CAF to Eligible Equity Shareholders as per their Rights Entitlement on
the Record Date. The CAF will clearly indicate the number of Equity Shares that the Eligible Equity Shareholder is
entitled to. Applicants may also choose to accept the offer to participate in the Issue by making plain paper
Applications. For more information, see the section entitled “Application on Plain Paper” at page 363.
The CAF consists of four parts:
Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares;
Part B: Form for renunciation;
Part C: Form for application for renouncees; and
Part D: Form for request for Split Application Forms.
Option available to the Eligible Equity Shareholders
The CAFs will clearly indicate the number of Equity Shares that the Eligible Equity Shareholder is entitled to.
If the Eligible Equity Shareholder applies for an investment in Equity Shares, then he can:
Apply for his Rights Entitlement of Equity Shares in full;
Apply for his Rights Entitlement of Equity Shares in part (without renouncing the other part);
Apply for his Rights Entitlement of Equity Shares in part and renounce the other part of the Equity
Shares;
Apply for his Rights Entitlement in full and apply for additional Equity Shares;
Renounce his Rights Entitlement in full.
Additional Equity Shares
360
You are eligible to apply for additional Equity Shares over and above your Rights Entitlement, provided that you are
eligible to apply under applicable law and have applied for all the Equity Shares offered without renouncing them in
whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and
allotment shall be made at the sole discretion of the Board, subject to sectoral caps and in consultation if necessary
with the Designated Stock Exchange and in the manner prescribed under the part entitled “Basis of Allotment” at
page 377.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for
additional Equity Shares in Part A of the CAF. The Renouncee applying for all the Equity Shares renounced in their
favour may also apply for additional Equity Shares.
Where the number of additional Equity Shares applied for exceeds the number available for Allotment, the
Allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
Renouncees who have subscribed for all the Equity Shares renounced in their favor may also apply for additional
Equity Shares.
Renunciation
This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in
favour of any other person or persons. Your attention is drawn to the fact that our Company shall not Allot and/or
register Equity Shares in favour of more than three persons (including joint holders), partnership firm(s) or their
nominee(s), minors, any trust or society (unless the same is registered under the Societies Registration Act, 1860 or
the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts and is authorised under its
constitution or bye-laws to hold Equity Shares, as the case may be). Applications by HUFs will be treated as on par
with applications by natural persons. Additionally, existing Eligible Equity Shareholders shall not renounce in favor
of persons or entities in the United States or who would otherwise be prohibited from being offered or subscribing
for Equity Shares or Rights Entitlement under applicable securities laws. Renouncees cannot participate in the
ASBA Process.
Any renunciation (i) from resident Indian equity shareholder(s) to non-resident(s), or (ii) from non-resident equity
shareholder(s) to resident Indian(s), or (iii) from a non-resident equity shareholder(s) to other non-resident(s), is
subject to the renouncer(s)/ renouncee(s) obtaining the necessary regulatory approvals. The
renouncer(s)/renouncee(s) is/ are required to obtain any such approval and attach the same to the CAF, along with
any other approval that may be required by such renouncer(s)/renouncee(s). All such renunciations shall be subject
to any conditions that may be specified in such regulatory approval. Applications not complying with conditions of
the approval/not accompanied by such approvals are liable to be rejected.
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”)
have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange
Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003.
Accordingly, the existing Equity Shareholders of our Company who do not wish to subscribe to the Equity Shares
being offered but wish to renounce the same in favour of Renouncee shall not renounce the same (whether for
consideration or otherwise) in favour of OCB(s).
Part „A‟ of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If
used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its
collecting branches specified on the reverse of the CAF with the form of renunciation (Part „B‟ of the CAF) duly
361
filled in shall be conclusive evidence for our Company of the person(s) applying for Equity Shares in Part „C‟ of the
CAF to receive Allotment of such Equity Shares. The Renouncees applying for all the Equity Shares renounced in
their favour may also apply for additional Equity Shares. Part „A‟ of the CAF must not be used by the Renouncee(s)
as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in
favour of any other person.
Procedure for renunciation
To renounce all the Equity Shares offered to an Eligible Equity Shareholder in favour of one Renouncee
If you wish to renounce the offer indicated in Part „A‟, in whole, please complete Part „B‟ of the CAF. In case of
joint holding, all joint holders must sign Part „B‟ of the CAF. The person in whose favour renunciation has been
made should complete and sign Part „C‟ of the CAF. In case of joint Renouncees, all joint Renouncees must sign
this part of the CAF.
To renounce in part/or renounce the whole to more than one person(s)
If you wish to either accept this offer in part and renounce the balance or renounce the entire offer under this Issue in
favour of two or more Renouncees, the CAF must be first split into requisite number of forms. Please indicate your
requirement of SAFs in the space provided for this purpose in Part „D‟ of the CAF and return the entire CAF to the
Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests
for SAFs. On receipt of the required number of SAFs from the Registrar, the procedure as mentioned in paragraph
above shall have to be followed.
In case the signature of the Eligible Equity Shareholder(s), who has renounced the Equity Shares, does not match
with the specimen registered with our Company, the application is liable to be rejected.
Renouncee(s)
The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part „C‟ of the CAF and
submit the entire CAF to the Bankers to the Issue on or before the Issue Closing Date along with the application
money in full.
Change and/or introduction of additional holders
If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already a
joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have
to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the
procedure, as stated above shall have to be followed.
However, this right of renunciation is subject to the express condition that our Board of Directors of our Company
shall be entitled in its absolute discretion to reject the request for Allotment from the Renouncee(s) without
assigning any reason therefore.
Instructions for Options
The summary of options available to the Eligible Equity Shareholder is presented below. You may exercise any of
the following options with regard to the Equity Shares offered, using the enclosed CAF:
362
Option Available Action Required
1. Accept whole or part of your Rights
Entitlement without renouncing the
balance
Fill in and sign Part A (All joint holders must sign)
2. Accept your Rights Entitlement in full
and apply for additional Equity Shares
Fill in and sign Part A including Block III relating to the
acceptance of entitlement and Block IV relating to additional
Equity Shares (All joint holders must sign)
3. Accept a part of your Rights Entitlement
and renounce the balance to one or more
Renouncee(s)
OR
Renounce your Rights Entitlement to all the
Equity Shares offered to you to more than one
Renouncee
Fill in and sign Part D (all joint holders must sign) requesting
for SAFs. Send the CAF to the Registrar to the Issue so as to
reach them on or before the last date for receiving requests for
SAFs. Splitting will be permitted only once
On receipt of the SAF take action as indicated below
For the Equity Shares you wish to accept, if any, fill in and
sign Part A
For the Equity Shares you wish to renounce, fill in and sign
Part B indicating the number of Equity Shares renounced and
hand it over to the Renouncee. Each of the Renouncee should
fill in and sign Part C for the Equity Shares accepted by them
4. Renounce your Rights Entitlement in full
to one person (Joint Renouncees are considered as
one)
Fill in and sign Part B (all joint holders must sign) indicating
the number of Equity Shares renounced and hand it over to the
Renouncee. The Renouncee must fill in and sign Part C (All
joint Renouncees must sign)
5. Introduce a joint holder or change the
sequence of joint holders
This will be treated as a renunciation. Fill in and sign Part B
and the Renouncee must fill in and sign Part C
In case of Equity Shares held in physical form, applicants must provide information in the CAF as to their
respective bank account numbers and name of the bank to enable the Registrar to print the said details on
the refund order. Failure to comply with this may lead to rejection of application. In case of Equity Shares
held in demat form, bank account details furnished by the Depositorties will be printed on the refund order.
Please note that:
Part „A‟ of the CAF must not be used by any person(s) other than the Eligible Equity Shareholder to
whom this Letter of Offer has been addressed. If used, this will render the application invalid.
Request for SAFs should be made for a minimum of one Equity Share or, in either case, in multiples
thereof and one SAF for the balance Equity Shares, if any.
Request by the Investor for the SAFs should reach the Registrar on or before [●].
363
Only the Eligible Equity Shareholder to whom this Letter of Offer has been addressed shall be entitled
to renounce and to apply for SAFs. Forms once split cannot be split further.
SAFs will be sent to the Investor(s) by post at the applicant‟s risk.
Eligible Equity Shareholders shall not renounce in favour of persons or entities in the United States or
who would otherwise be prohibited from being offered or subscribing for Equity Shares or Rights
Entitlement under applicable securities laws.
While applying for or renouncing their Rights Entitlement, joint Eligible Equity Shareholders must
sign the Application Form or SAF in the same order and as per specimen signatures recorded with the
Company/ Depositories.
Application(s) received from Non-Resident/NRIs, or persons of Indian origin residing abroad shall be
subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of
refund of Application Money, Allotment of Equity Shares, interest, export of share certifications, etc.
In case a Non-Resident or NRI Eligible Equity Shareholder has specific approval from the RBI, in
connection with his shareholder, he should enclose a copy of such approval with the CAF.
Availability of duplicate CAF
In case the original CAF is not received, or is misplaced by the Investor, the Registrar to the Issue will issue a
duplicate CAF on the request of the Investor who should furnish the registered folio number/ DP and Client ID and
his/ her full name and address to the Registrar to the Issue. Please note that the request for duplicate CAF should
reach the Registrar to the Issue within [●] days from the Issue Opening Date. Please note that those who are making
the application in the duplicate form should not utilize the original CAF for any purpose including renunciation,
even if it is received/ found subsequently. If the Investor violates such requirements, he / she shall face the risk of
rejection of either original CAF or both the applications.
Neither the Company or the Registrar or Lead Manager to the Issue will be responsible for postal delays or loss of
duplicate CAF in transit, if any.
Please also note that shareholder has an option to print the duplicate CAF from the website of the Registrar to the
Issue (Web site: www.linkintime.co.in) by providing his / her folio. no. / DP ID / Client ID to enable the shareholder
to apply for the Issue.
Application on Plain Paper
An Investor who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an
application to subscribe to the Issue on plain paper, along with a/c payee cheque drawn at par / Demand Draft, net of
bank and postal charges payable at Mumbai and the Investor should send the same by registered post directly to the
Registrar to the Issue. Applications on plain paper will not be accepted from any address outside India. For more
information on the mode of payment, see the section entitled “Modes of Payment” at page [●].
The envelope should be super scribed “[●]” and should be postmarked in India. The application on plain paper, duly
signed by the Investors including joint holders, in the same order as per specimen recorded with our Company /
Depository, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the
following particulars:
364
Name of Issuer, being Reliance MediaWorks Limited;
Name and address of the Investor including joint holders;
Registered Folio Number/ DP and Client ID;
Number of Equity Shares held as on Record Date;
Share certificate numbers and distinctive numbers of Equity Shares, if held in physical form;
Allotment option preferred – physical or demat form, if held in physical form;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total application amount paid at the rate of `[●] per Equity Share;
Particulars of cheque/ demand draft;
Savings/Current Account Number and name and address of the bank where the Investor will be
depositing the refund order;
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, PAN number of the Investor and for each Investor in case of joint
names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue.
Signatures of Eligible Equity Shareholders to appear in the same sequence and order as they appear in
the records of the Company or depository records; and
If the payment is made by a draft purchased from NRE/FCNR/NRO account, as the case may be, an
account debit certificate from the bank issuing the demand draft confirming that the demand draft has
been issued by debiting the NRE/FCNR/NRO account.
Additionally, all applicants shall include the following:
“I/We understand that neither the Rights Entitlement nor the Equity Shares have been, and will be, registered under
the United States Securities Act of 1933, as amended (“US Securities Act”) or any United States state securities
laws, and may not be offered, sold, resold or otherwise transferred within the United States or to the territories or
possessions thereof (“United States”). I/we understand the Equity Shares referred to in this application are being
offered in India but not in the United States. I/we understand the offering to which this application relates is not,
and under no circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlement for sale in
the United States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlement
in the United States. Accordingly, I/we understand this application should not be forwarded to or transmitted in or
to the United States at any time. I/we understand that none of the Company, the Registrar, the Lead Manager or any
other person acting on behalf of the Company will accept subscriptions from any person, or the agent of any person,
who appears to be, or who the Company, the Registrar, the Lead Manager or any other person acting on behalf of
the Company has reason to believe is, a resident of the United States.
I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any
jurisdiction or under any circumstances in which such offer or sale is not authorised or to any person to whom it is
unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any
applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability
standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence.
365
I/We understand and agree that the Rights Entitlement and Equity Shares may not be reoffered, resold, pledged or
otherwise transferred except in an offshore transaction in compliance with Regulation S, or otherwise pursuant to
an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.
I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlement and/or the
Equity Shares is/are, outside the United States, and (ii) is/are acquiring the Rights Entitlement and/or the Equity
Shares in an offshore transaction meeting the requirements of Regulation S.
I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and
accuracy of the foregoing representations and agreements.”
Please note that those who are making the application otherwise than on original CAF shall not be entitled to
renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is
received subsequently. If the Investor violates such requirements, he/she shall face the risk of rejection of both the
applications. Our Company shall refund such application amount to the Investor without any interest thereon.
Last date for Application
The last date for submission of the duly filled in CAF is [●]. The Board may extend the said date for such period as
it may determine from time to time, subject to the Issue Period not exceeding 30 days. The last date of receiving
requests for CAFs is [●]
If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on or
before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/
Committee of Directors, the invitation to offer contained in the Letter of Offer shall be deemed to have been
declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered,
as provided under part entitled “Basis of Allotment” at page 377.
Modes of Payment
Mode of Payment for Resident Eligible Equity Shareholders/ Investors
All cheques / demand drafts accompanying the CAF should be drawn in favour of “[●]”, crossed „A/c
Payee only‟ and should be submitted along with the CAF to the Bankers to the Issue/Collecting Bank
or to the Registrar to the Issue, as the case may be;
Investors residing at places other than places where the bank collection centres have been opened by
our Company for collecting applications, are requested to send their CAFs together with Demand
Draft for the full application amount, net of bank and postal charges drawn in favour of “[●]”, crossed
„A/c Payee only‟ and marked “[●]” payable at Mumbai directly to the Registrar to the Issue by
registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar
to the Issue will not be responsible for postal delays or loss of applications in transit, if any.
Investors applying under the ASBA Process agree to authorize the SCSB to block an amount equivalent to the
Application Money in the relevant ASBA Account at the time of submission of the CAF. After verifying that
sufficient funds are available in the ASBA Account details of which are provided in the CAF, the SCSB shall block
an amount equivalent to the Application Money mentioned in the CAF until it receives instructions from the
Registrar to the Issue. Upon receipt of intimation from the Registrar to the Issue, the SCSBs shall transfer such
366
amount as per the Registrar to the Issue‟s instruction from the ASBA Account. This amount will be transferred in
terms of the SEBI ICDR Regulations, into the separate bank account maintained by the Company as per the
provisions of Section 73(3) of the Companies Act. The balance amount remaining in the ASBA Accounts after the
finalisation of the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this
regard by the Registrar to the Issue and the Lead Managers to the respective SCSB. An Investor applying under the
ASBA Process would be required to give instruction to block the entire Application Money at the time of the
submission of the CAF. The SCSB may reject the Application at the time of acceptance of CAF if the ASBA
Account details of which have been provided by the Eligible Equity Shareholder in the CAF does not have sufficient
funds equivalent to the Application Money mentioned in the CAF. Subsequent to the acceptance of the Application
by the SCSB, the Company would have a right to reject the Application only on technical grounds.
In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for
making applications on own account using ASBA facility, they should have a separate account in their own
name with any other SEBI registered SCSB. Such account shall be used solely for the purpose of making
application in public issues and clear demarcated funds should be available in such account for ASBA
applications.
Mode of Payment for Non-Resident Eligible Equity Shareholders/ Investors
As regards the application by non-resident Investor, the following conditions shall apply:
Individual non-resident applicants who are permitted to subscribe for Equity Shares by applicable
local securities laws can obtain application forms from the following address:
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Tel: +91 22 2596 7878
Toll-free: 1-800-22-0878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR 0000 04058
Applications will not be accepted from non-resident Indian in the United States or its territories and
possessions, or any other jurisdiction where the offer or sale of the Rights Entitlements and Equity
Shares may be restricted by applicable securities laws.
All non-resident investors should draw the cheques/demand drafts in favour of “[●]”, crossed “A/c
Payee only” for the full application amount, net of bank and postal charges and which should be
submitted along with the CAF to the Bankers to the Issue/Collecting Bank or to the Registrar to the
Issue.
Non-resident investors applying from places other than places where the bank collection centres have
been opened by our Company for collecting applications, are requested to send their CAFs together
367
with Demand Draft for the full application amount, net of bank and postal charges drawn in favour of
“[●]”, crossed „A/c Payee only‟ and marked “[●]” payable at Mumbai directly to the Registrar to the
Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the
Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.
Payment by non-residents must be made by demand draft payable or drawn at Mumbai / cheque
payable drawn on a bank account maintained at [●] or funds remitted from abroad in any of the
following ways:
Application with repatriation benefits
By the ASBA Process, from the ASBA Account maintained with an SCSB;
By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad
(submitted along with Foreign Inward Remittance Certificate); or
By cheque / draft drawn on a NRE or FCNR Account maintained in [●]; or
By Rupee draft purchased by debit to NRE / FCNR Account maintained elsewhere in India and
payable in Mumbai; or
FIIs registered with SEBI must remit funds from special non-resident rupee account.
If the payment is made by a draft purchased from NRE/FCNR account, as the case may be, an account debit
certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR
account. FIIs registered with SEBI must utilise funds from special non-resident rupee account. NR Investors
applying with repatriation benefits should draw cheques/drafts in favor of “[●] – Rights Issue-NR” and must be
crossed as “Account Payee Only” for the full Application Money, net of bank and postal charges.
Application without repatriation benefits
By the ASBA Process, from the ASBA Account maintained with an SCSB;
As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in addition to
the modes specified above, payment may also be made by way of cheque drawn on Non-Resident
(Ordinary) Account maintained in [●] or Rupee Draft purchased out of NRO Account maintained
elsewhere in India but payable at Mumbai. In such cases, the Allotment of Equity Shares will be on
non-repatriation basis.
Applicants should note that where payment is made through drafts purchased from NRE /
FCNR / NRO accounts as the case may be, an account debit certificate from the bank issuing the
draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account
should be enclosed with the CAF. In the absence of such an account debit certificate, the
application shall be considered incomplete and is liable to be rejected.
All cheques / demand drafts submitted by NRs applying on a non-repatriation basis should be drawn in
favor of “[●] – Rights Issue - R” and must be crossed as “Account Payee Only” for the full
368
Application Money, net of bank and postal charges. The Application Forms duly completed together
with the Application Money must be deposited before the close of banking hours on or before the
Issue Closing Date. If Application is made through CAF, the Collecting Bank shall be indicated on the
reverse of the CAFs. A separate cheque or bank draft must accompany each CAF.
An eligible Shareholder whose status has changed from resident to non-resident should open a new
demat account reflecting the changes status. Any application from a demat account which does not
reflect the accurate status of the Applicant are liable to be rejected at the sole discretion of our
Company and the Lead Managers.
Notes:
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the
investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to
the IT Act.
In case Equity Shares are allotted on a non-repatriation basis, the dividend and sale proceeds of the
Equity Shares cannot be remitted outside India.
The CAF duly completed together with the amount payable on application must be deposited with the
Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before
the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
In case of an application received from non-residents, Allotment, refunds and other distribution, if any,
will be made in accordance with the guidelines/ rules prescribed by RBI / Government of India as
applicable at the time of making such Allotment, remittance and subject to necessary approvals.
Applications received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment of
Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the
RBI under the FEMA, in respect of matters including Refund of Application Money, Allotment of
Equity Shares, subsequent issue and allotment of Equity Shares, interest and export of share
certificates.
Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process
This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the
ASBA Process. Our Company and the Lead Manager are not liable for any amendments or modifications or
changes in applicable laws or regulations, which may occur after the date of the Letter of Offer. Investors
who are eligible to apply under the ASBA Process are advised to make their independent investigations and
to ensure that the CAF is correctly filled up.
The list of banks that have been notified by SEBI to act as SCSBs for the ASBA Process is provided on
http://www.sebi.gov.in. For details on Designated Branches of SCSBs collecting the CAF, please refer the above
mentioned SEBI link.
Equity Shareholders who are eligible to apply under the ASBA Process
369
The option of applying for Equity Shares in the Issue through the ASBA Process is only available to the Investors of
our Company on the Record Date and who:
hold the Equity Shares in dematerialised form as on the Record Date and have applied towards
his/her Rights Entitlements or additional Equity Shares in the Issue in dematerialised form;
have not renounced his/her Rights Entitlements in full or in part;
are not in the United States and are eligible under applicable securities laws to subscribe for the
Rights Entitlements and Equity Shares in the Issue;
are not a Renouncee; and
are applying through a bank account maintained with SCSBs.
CAF
The Registrar will despatch the CAF to all Eligible Equity Shareholders as per their Rights Entitlement on the
Record Date for the Issue. Those Investors who wish to apply through the ASBA payment mechanism will have to
select for this mechanism in Part A of the CAF and provide necessary details.
Investors desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option
in Part A of the CAF only. Application in electronic mode will only be available with such SCSBs who provide such
facility. The Investor shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to
the amount payable on the application in the said ASBA Account.
Mor than one Investor may apply using the same ASBA Account provided that the SCSB will not accept a total of
more than give CAFs with respect to any single ASBA Account.
Acceptance of the Issue
You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the respective
CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the
SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be
specified by our Board of Directors of our Company in this regard.
Mode of payment
The Investor applying under the ASBA Process agrees to block the entire amount payable on application with the
submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on
application, in a bank account maintained with the SCSB.
After verifying that sufficient funds are available in the bank account details of which are provided in the CAF, the
SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives
instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount
as per the Registrar‟s instruction from the bank account with the SCSB mentioned by the Investor in the CAF. This
amount will be transferred in terms of the ICDR Regulations, into the separate bank account maintained by our
Company as per the provisions of section 73(3) of the Companies Act. The balance amount remaining after the
finalisation of the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this
regard by the Registrar to the Issue and the Lead Manager to the respective SCSB.
370
The Investor applying under the ASBA Process would be required to block the entire amount payable on their
application at the time of the submission of the CAF.
The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of
which have been provided by the Investor in the CAF does not have sufficient funds equivalent to the amount
payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, our
Company would have a right to reject the application only on technical grounds.
Options available to the Equity Shareholders applying under the ASBA Process
The summary of options available to the Investors is presented below. You may exercise any of the following
options with regard to the Equity Shares, using the respective CAFs received from Registrar:
Option Available Action Required
1. Accept whole or part of your Rights Entitlement
without renouncing the balance.
Fill in and sign Part A of the CAF (All joint holders
must sign)
2. Accept your Rights Entitlement in full and apply for
additional Equity Shares
Fill in and sign Part A of the CAF including Block III
relating to the acceptance of entitlement and Block IV
relating to additional Equity Shares (All joint holders
must sign)
The Investors applying under the ASBA Process will need to select the ASBA option process in the CAF and
provide required necessary details. However, in cases where this option is not selected, but the CAF is
tendered to the SCSBs with the relevant details required under the ASBA process option and the SCSBs
block the requisite amount, then that CAFs would be treated as if the Investor have selected to apply through
the ASBA process option.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing
number CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Institutional
applications or are applying in this Issue for Equity Shares for an amount exceeding `2,00,000 shall
mandatorily make use of ASBA facility.
Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are
entitled to, provided that you are eligible to apply for Equity Shares under applicable law and you have applied for
all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other
person(s). Applications for additional Equity Shares shall be considered and Allotment shall be made at the sole
discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under
“Basis of Allotment” in this chapter at page 377.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for
additional Equity Shares in Part A of the CAF.
Renunciation under the ASBA Process
Renouncees cannot participate in the Issue through ASBA Process.
371
Application on Plain Paper under ASBA process
An Investor who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is
applying under the ASBA Process may make an application to subscribe to the Issue on plain paper, along with
Demand Draft, net of bank and postal charges payable at Mumbai which should be drawn in favour of the “[●]” and
the Investors should send the same by registered post directly to the SCSB. Applications on plain paper will not be
accepted from any address outside India.
The envelope should be super scribed “[●]” and should be postmarked in India. The application on plain paper, duly
signed by the Investors including joint holders, in the same order as per the specimen recorded with our Company /
Depositories, must reach the office of the SCSB before the Issue Closing Date and should contain the following
particulars:
Name of Issuer, being Reliance MediaWorks Limited;
Name and address of the Investor including joint holders;
Registered Folio Number/ DP and Client ID.;
Number of Equity Shares held as on Record Date;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total amount paid at the rate of `[●] per Equity Share;
Details of the ASBA Account such as the account number, name, address and branch of the relevant SCSB;
In case of NR Eligible Equity Shareholders, details of the NRE/FCNR/NRO account such as the account
number, name, address and branch of the SCSB with which the account is maintained;
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, PAN number of the Investor and for each Investor in case of joint
names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue;
In case of joint holders, signatures of Eligible Equity Shareholders to appear in the same sequence and
order as they appear in the records of the Company and also the depository records; and
Additionally, all applicants shall include the following:
“I/We understand that neither the Rights Entitlement nor the Equity Shares have been, and will be, registered under
the United States Securities Act of 1933, as amended (“US Securities Act”) or any United States state securities
laws, and may not be offered, sold, resold or otherwise transferred within the United States or to the territories or
possessions thereof (“United States”). I/we understand the Equity Shares referred to in this application are being
offered in India but not in the United States. I/we understand the offering to which this application relates is not,
and under no circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlement for sale in
the United States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlement
in the United States. Accordingly, I/we understand this application should not be forwarded to or transmitted in or
to the United States at any time. I/we understand that none of the Company, the Registrar, the Lead Manager or any
other person acting on behalf of the Company will accept subscriptions from any person, or the agent of any person,
who appears to be, or who the Company, the Registrar, the Lead Manager or any other person acting on behalf of
the Company has reason to believe is, a resident of the United States.
I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any
jurisdiction or under any circumstances in which such offer or sale is not authorised or to any person to whom it is
372
unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any
applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability
standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence.
I/We understand and agree that the Rights Entitlement and Equity Shares may not be reoffered, resold, pledged or
otherwise transferred except in an offshore transaction in compliance with Regulation S, or otherwise pursuant to
an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.
I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlement and/or the
Equity Shares is/are, outside the United States, and (ii) is/are acquiring the Rights Entitlement and/or the Equity
Shares in an offshore transaction meeting the requirements of Regulation S.
I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and
accuracy of the foregoing representations and agreements.”
Option to receive Equity Shares in Dematerialized Form
INVESTORS UNDER THE ASBA PROCESS MAY NOTE THAT THE EQUITY SHARES UNDER THE
ASBA PROCESS CAN BE ALLOTTED ONLY IN DEMATERIALIZED FORM AND TO THE SAME
DEPOSITORY ACCOUNT IN WHICH THE EQUITY SAHRES ARE HELD BY SUCH ASBA
APPLICANT ON THE RECORD DATE.
General instructions for Investors applying under the ASBA Process
(a) Please read the instructions printed on the respective CAF carefully.
(b) Application should be made on the printed CAF only and should be completed in all respects. The CAF
found incomplete with regard to any of the particulars required to be given therein, and / or which are
not completed in conformity with the terms of this Letter of Offer are liable to be rejected. The CAF
must be filled in English. In case of non-receipt of CAF, Application can be made on plain paper
mentioning all necessary details as mentioned under the section entitled “Application on Plain Paper” at
page 363.
(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose
bank account details are provided in the CAF and not to the Bankers to the Issue / Collecting Banks
(assuming that such Collecting Bank is not a SCSB), to our Company or Registrar or Lead Manager to
the Issue. Plain-paper Applications are to be submitted with the Registrar to the Issue.
(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention
his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the
application. Except for applications on behalf of the Central or State Government, the residents of
Sikkim and the officials appointed by the courts, CAFs without PAN will be considered incomplete and
are liable to be rejected. With effect from 16 August 2010, the demat accounts for Investors for which
PAN details have not been verified shall be “suspended credit” and no allotment and credit of Equity
Shares pursuant to the Issue shall be made into the accounts of such Investors.
373
(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB.
Cash payment is not acceptable. In case payment is affected in contravention of this, the application may
be deemed invalid and the application money will be refunded and no interest will be paid thereon.
(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule
to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be
attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Investors
must sign the CAF as per the specimen signature recorded with our Company/or Depositories.
(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as
per the specimen signature(s) recorded with our Company. In case of joint applicants, reference, if any,
will be made in the first applicant‟s name and all communication will be addressed to the first applicant.
(h) All communication in connection with application for the Equity Shares, including any change in
address of the Investors should be addressed to the Registrar to the Issue prior to the date of Allotment in
this Issue quoting the name of the first/sole applicant Investor, folio numbers and CAF number.
(i) Only the person or persons to whom the Equity Shares have been offered and not renouncee(s) shall be
eligible to participate under the ASBA process.
(j) Only persons outside the United States and who are eligible to subscribe for Rights Entitlement and
Equity Shares under applicable securities laws are eligible to participate.
(k) Only the Eligible Equity Shareholders holding shares in dematerialized form are eligible to participate
through ASBA process.
(l) In case of non-receipt of CAF, application can be made on plain paper mentioning all necessary details
as mentioned as mentioned under the heading “Application on Plain Paper” at page 363.
(m) In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure
that for making applications on own account using ASBA facility, they should have a separate
account in own name with any other SEBI registered SCSBs. Such account shall be used solely for
the purpose of making application in public issues and clear demarcated funds should be available
in such account for ASBA applications.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number
CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Institutional applicants or are
applying in this Issue for Equity Shares for an amount exceeding `2,00,000 /- shall mandatorily make use of ASBA
facility.
Do’s:
a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.
b. Ensure that you submit your application in physical mode only. Electronic mode is only available with
certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you.
374
c. Ensure that the details about your Depository Participant and beneficiary account are correct and the
beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.
d. Ensure that the CAFs are submitted at the SCSBs and details of the correct bank account have been
provided in the CAF.
e. Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for}
X {Issue Price of Equity Shares, as the case may be}) available in the bank account maintained with the
SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the
SCSB.
f. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on
application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which
details are provided in the CAF and have signed the same.
g. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical
form.
h. Except for CAFs submitted on behalf of the Central or State Government and the residents of Sikkim
and the officials appointed by the courts, each applicant should mention their PAN allotted under the I.
T. Act.
i. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary
account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that
the beneficiary account is also held in same joint names and such names are in the same sequence in
which they appear in the CAF.
j. Ensure that the Demographic Details are updated, true and correct, in all respects.
k. Ensure that the account holder in whose bank account the funds are to be blocked has signed authorizing
such funds to be blocked.
l. Do not apply through non ASBA process if you are a QIB or Non Institutional investors or if you are and
Applicant whose Application Money exceeds ` 2,00,000
Don’ts:
a. Do not apply if you are in the United States or are not eligible to participate in the Issue under the
securities laws applicable to your jurisdiction.
b. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.
c. Do not apply through a CAF, as well as a plain-paper Application for additional Equity Shares,
renunciation or any other purpose.
d. Do not pay the amount payable on application in cash, by money order or by postal order.
375
e. Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming
that such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of
the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.
f. Do not submit more than five CAFs per ASBA Account.
g. Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this
ground.
h. Do not instruct your respective banks to release the funds blocked under the ASBA Process.
Grounds for Technical Rejection under the ASBA Process
In addition to the grounds listed under the part entitled “Grounds for Technical Rejection” in this chapter at page
384, applications under the ABSA Process are liable to be rejected on the following grounds:
a) Application on a SAF (unless all the SAFs are used by the original shareholder).
b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with
the Registrar.
c) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not
a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.
d) Renouncee applying under the ASBA Process.
e) Insufficient funds are available with the SCSB for blocking the amount.
f) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen
pursuant to regulatory orders.
g) Account holder not signing the CAF or declaration mentioned therein.
h) CAFs that do not include the certification set out in the CAF to the effect that the subscriber does not have
a registered address (and is not otherwise located) in the United States and is authorised to acquire the
rights and the securities in compliance with all applicable laws and regulations.
i) CAFs which have evidence of being executed in/dispatched from the United States.
j) Application by Applicants, that are QIBs, or Applicants whose Application money exceeds ` 200,000 who
are eligible to apply through ASBA Process, made through non-ASBA process.
k) Application by persons not competent to contract under the Indian Contract Act, 1872, as amended, except
applications by minors having valid demat accounts as per the demographic details provided by the
Depositories.
l) The Application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for is
more than ` 200,000, but has applied separately through split CAFs of less than ` 200,000 each has not
done so through the ASBA process.
376
m) Submitting the GIR instead of the PAN.
n) Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.
o) Submission of more than five CAFs per ASBA Account.
p) Application for Rights Entitlements or additional Equity Shares in physical form.
q) ASBA bids by SCSB on own account, other than through an ASBA Account in its own name with any
other SCSB.
Depository account and bank details for Investors applying under the ASBA Process
IT IS MANDATORY FOR ALL THE INVESTORS APPLYING UNDER THE ASBA PROCESS TO
RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM AND TO THE SAME
DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE HELD BY THE INVESTOR AS ON
THE RECORD DATE. ALL INVESTORS APPLYING UNDER THE ASBA PROCESS SHOULD
MENTION THEIR DEPOSITORY PARTICIPANT‟S NAME, DEPOSITORY PARTICIPANT
IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. INVESTORS
APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS
EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE
THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY
ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN
WHICH THEY APPEAR IN THE CAF.
Investors applying under the ASBA Process should note that on the basis of name of these Investors,
Depository Participant‟s name and identification number and beneficiary account number provided by them
in the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Investors
such as address, bank account details for printing on refund orders and occupation (“Demographic Details”).
Hence, Investors applying under the ASBA Process should carefully fill in their Depository Account details in
the CAF.
These Demographic Details would be used for all correspondence with such Investors including mailing of the
letters intimating unblock of bank account of the respective Investor. The Demographic Details given by the
Investors in the CAF would not be used for any other purposes by the Registrar. Hence, Investors are advised to
update their Demographic Details as provided to their Depository Participants.
By signing the CAFs, the Investors applying under the ASBA Process would be deemed to have authorised the
Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on
its records.
Letters intimating Allotment and unblocking or refund (if any) would be mailed at the address of the Investor
applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if
any, will be made directly to the bank account linked to the DP ID. Investors applying under the ASBA
Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same
once sent to the address obtained from the Depositories are returned undelivered. In such an event, the
377
address and other details given by the Investor in the CAF would be used only to ensure dispatch of letters
intimating unblocking of bank account.
Note that any such delay shall be at the sole risk of the Investors applying under the ASBA Process and none
of our Company, the SCSBs or the Lead Manager shall be liable to compensate the Investor applying under
the ASBA Process for any losses caused due to any such delay or liable to pay any interest for such delay.
In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the
Investors (including the order of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then
such applications are liable to be rejected.
Underwriting
The Issue is not underwritten.
Issue Schedule
Issue Opening Date: [●]
Last date for receiving requests for SAFs: [●]
Issue Closing Date: [●]
The Board may however decide to extend the Issue period as it may determine from time to time but not exceeding
30 days from the Issue Opening Date.
Basis of Allotment
Subject to the provisions contained in the Letter of Offer, the Articles of Association of our Company and the
approval of the Designated Stock Exchange, the Board will proceed to Allot the Equity Shares in the following order
of priority:
(a) Full Allotment to those Investors who have applied for their Rights Entitlement either in full or in part and
also to the Renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in
part.
(b) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of [●].
(c) Investors whose fractional entitlements are being ignored would be given preference in allotment of one
additional Equity Share each if they apply for additional Equity Share. Allotment under this head shall be
considered if there are any unsubscribed Equity Shares after allotment under (a) above. If number of Equity
Shares required for allotment under this head are more than number of Equity Shares available after
allotment under (a) above, the Allotment would be made on a fair and equitable basis in consultation with
the Designated Stock Exchange.
(d) Allotment to the Investors who having applied for all the Equity Shares offered to them as part of the Issue
and have also applied for additional Equity Shares. The Allotment of such additional Equity Shares will be
made as far as possible on an equitable basis having due regard to the number of Equity Shares held by
them on the Record Date, provided there is an under-subscribed portion after making full Allotment in (a)
378
and (b) above. The Allotment of such Equity Shares will be at the sole discretion of the Board / Committee
of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and will not be a
preferential Allotment.
(e) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have
applied for additional Equity Shares provided there is surplus available after making full Allotment under
(a), (b) and (c) above. The Allotment of such Equity Shares will be at the sole discretion of the
Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue
and not preferential Allotment.
(f) Our Promoters have, through the Subscription Letter, jointly and severally, undertaken to (i) apply for
Equity Shares being offered to them pursuant to the Issue to the extent of their Rights Entitlement; (ii)
apply directly or through our Company‟s Promoter Group for any Equity Shares renounced in their favour;
and (iii) apply directly or through the Company‟s Promoter Group for any additional Equity Shares in the
Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable law, to
ensure that at least 90% of the Rights Issue is subscribed.
As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance
with the paragraph above, the Promoters may acquire Equity Shares over and above their Rights Entitlement which
may result in an increase in their shareholding, individually and / or collectively, above their current shareholding.
Any such subscription and acquisition of Equity Shares by the Promoters in the Rights Issue will not result in
change of control of the management of the Company in accordance with Regulation 3 (2) of the Takeover
Regulations and shall be exempt in terms of Regulation 10 (4) (b) of the Takeover Code. Further, such subscription
to additional Equity Shares by the Promoters beyond their Rights Entitlement will be in accordance with the
provisions of Regulation 10(4) (b) of the Takeover Regulations. As such, other than meeting the requirements
indicated in the chapter entitled “Objects of the Issue” at page 84, there is no other intention / purpose for the Issue,
including any intention to delist our Equity Shares, even if, as a result of any Allotment in the Issue to our
Promoter(s) and / or the members of our Promoter Group, the shareholding of our Promoters and/or Promoter Group
in our Company exceeds their current shareholding.
However, such participation will not result in breach of minimum public shareholding requirement stipulated in the
equity Listing Agreement entered into between us and the Stock Exchanges.
Allotment Advices / Refund Orders
Our Company will issue and dispatch Allotment advice/ share certificates / demat credit and/or letters of regret
along with refund order or credit the allotted Equity Shares to the respective beneficiary accounts, if any, within a
period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our
Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock
Exchange(s), whichever is earlier) our Company and every Director of our Company who is an officer in default
shall, on and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed
under Section 73 of the Companies Act.
Investors residing at centers where clearing houses are managed by the RBI will get refunds through National
Electronic Clearing Service (“NECS”) except where Investors have not provided the details required to send
electronic refunds or where the Investors are otherwise disclosed as applicable or eligible to get refunds through
direct credit and real-time gross settlement (“RTGS”).
379
In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form using electronic
credit under the depository system, advice regarding their credit of the Equity Shares shall be given separately.
Investors to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post
intimating them about the mode of credit of refund within 15 days of the Issue Closing Date.
In case of those Investors who have opted to receive their Rights Entitlement in physical form and our Company
issues letter of allotment, the corresponding share certificates will be kept ready within one month from the date of
Allotment thereof or such extended time as may be approved by our Company Law Board under Section 113 of the
Companies Act or other applicable provisions, if any. Investors are requested to preserve such letters of allotment,
which would be exchanged later for the share certificates.
The letter of allotment / refund order would be sent by registered post / speed post to the sole / first Investors
registered address. Such refund orders would be payable at par at all places where the applications were originally
accepted. The same would be marked „Account Payee only‟ and would be drawn in favour of the sole/first Investor.
Adequate funds would be made available to the Registrar to the Issue for this purpose. The letter of allotment /
Intimations would be sent by ordinary post.
Payment of Refund
Mode of making refunds
The payment of refund, if any, would be done through any of the following modes:
1. NECS – Payment of refund would be done through NECS for Investors having an account at any of the
centres where such facility has been made available. This mode of payment of refunds would be subject to
availability of complete bank account details including the MICR code as appearing on a cheque leaf, from
the Depositories/the records of the Registrar. The payment of refunds is mandatory for Investors having a
bank account at any centre where NECS facility has been made available (subject to availability of all
information for crediting the refund through NECS).
2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors‟ bank has been
assigned the Indian Financial System Code (IFSC), which can be linked to a MICR, allotted to that
particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately
prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the Investors have
registered their nine digit MICR number and their bank account number with the registrar to our Company
or with the depository participant while opening and operating the demat account, the same will be duly
mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the
Investors through this method.
3. Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be eligible to receive
refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne
by our Company.
4. RTGS – If the refund amount exceeds `2 lakhs, the investors have the option to receive refund through
RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required
to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through
ECS or any other eligible mode. Charges, if any, levied by the refund bank(s) for the same would be borne
380
by our Company. Charges, if any, levied by the Investor‟s bank receiving the credit would be borne by the
Investor.
5. For all other Investors the refund orders will be despatched through Speed Post/ Registered Post. Such
refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and
payable at par.
6. Credit of refunds to Investors in any other electronic manner permissible under the banking laws which is
in force, and is permitted by the SEBI from time to time.
Printing of Bank Particulars on Refund Orders
As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the
particulars of the Investor‟s bank account are mandatorily required to be given for printing on the refund orders.
Bank account particulars, where available, will be printed on the refund orders/refund warrants which can then be
deposited only in the account specified. Our Company will in no way be responsible if any loss occurs through these
instruments falling into improper hands either through forgery or fraud.
Allotment advice / Share Certificates/ Demat Credit
Allotment advice/ demat credit or letters of regret will be dispatched to the registered address of the first named
Investor or respective beneficiary accounts within 15 days, from the Issue Closing Date. In case our Company issues
Allotment advice, the relative share certificates will be dispatched within one month from the date of the Allotment.
Allottees are requested to preserve such allotment advice (if any) to be exchanged later for share certificates.
Option to receive Equity Shares in Dematerialized Form
Investors shall be allotted the Equity Shares in dematerialized (electronic) form at the option of the Investor. Our
Company has signed a tripartite agreement with NSDL on October 31, 2000 which enables the Investors to hold and
trade in Equity Shares in a dematerialized form, instead of holding the Equity Shares in the form of physical
certificates. Our Company has also signed a tripartite agreement with CDSL on September 14, 2000 which enables
the Investors to hold and trade in Equity Shares in a dematerialized form, instead of holding the Equity Shares in the
form of physical certificates.
In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares
in the form of an electronic credit to their beneficiary account as given in the CAF, after verification with a
depository participant. Investor will have to give the relevant particulars for this purpose in the appropriate place in
the CAF. Allotment advice, refund order (if any) would be sent directly to the Investor by the Registrar to the Issue
but the Investor‟s depository participant will provide to him the confirmation of the credit of such Equity Shares to
the Investor‟s depository account. CAFs, which do not accurately contain this information, will be given the Equity
Shares in physical form. No separate CAFs for Equity Shares in physical and /or dematerialized form should be
made. If such CAFs are made, the CAFs for physical Equity Shares will be treated as multiple CAFs and is liable to
be rejected. In case of partial Allotment, Allotment will be done in demat option for the Equity Shares sought in
demat and balance, if any, will be allotted in physical Equity Shares. Eligible Equity Shareholders of the Company
holding Equity Shares in physical form may opt to receive Equity Shares in the Issue in dematerialized form.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE
TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM.
381
The procedure for availing the facility for Allotment of Equity Shares in this Issue in the electronic form is as under:
Open a beneficiary account with any depository participant (care should be taken that the beneficiary
account should carry the name of the holder in the same manner as is registered in the records of our
Company. In the case of joint holding, the beneficiary account should be opened carrying the names of
the holders in the same order as registered in the records of our Company). In case of Investors having
various folios in our Company with different joint holders, the Investors will have to open separate
accounts for such holdings. Those Investors who have already opened such beneficiary account(s) need
not adhere to this step.
For Eligible Equity Shareholders already holding Equity Shares of our Company in dematerialized form
as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open
accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to
this Issue by way of credit to such account, the necessary details of their beneficiary account should be
filled in the space provided in the CAF. It may be noted that the Allotment of Equity Shares arising out
of this Issue may be made in dematerialized form even if the original Equity Shares of our Company are
not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the
Investors and the names are in the same order as in the records of our Company/Depositories.
The responsibility for correctness of information (including Investor‟s age and other details) filled in the CAF vis-à-
vis such information with the Investor‟s depository participant, would rest with the Investor. Investors should ensure
that the names of the Investors and the order in which they appear in CAF should be the same as registered with the
Investor‟s depository participant.
If incomplete / incorrect beneficiary account details are given in the CAF, the Investor will get Equity Shares in
physical form.
The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the
beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent
directly to the applicant by the Registrar to the Issue but the applicant‟s depository participant will provide to him
the confirmation of the credit of such Equity Shares to the applicant‟s depository account.
Renouncees will also have to provide the necessary details about their beneficiary account for Allotment of Equity
Shares in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.
General instructions for Investors
(a) Please read the instructions printed on the enclosed CAF carefully.
(b) Application should be made on the printed CAF, provided by our Company except as mentioned
under the head “Application on Plain Paper” in this section at page 363 and should be completed
in all respects. The CAF found incomplete with regard to any of the particulars required to be
given therein, and/ or which are not completed in conformity with the terms of the Letter of Offer
are liable to be rejected and the money paid, if any, in respect thereof will be refunded without
interest and after deduction of bank commission and other charges, if any. The CAF must be filled
in English and the names of all the Investors, details of occupation, address, father‟s / husband‟s
name must be filled in block letters.
382
The CAF together with the cheque / demand draft should be sent to the Bankers to the Issue/Collecting Bank or to
the Registrar to the Issue and not to our Company or Lead Manager to the Issue. Investors residing at places other
than cities where the branches of the Bankers to the Issue have been authorised by our Company for collecting
applications, will have to make payment by Demand Draft payable at Mumbai of an amount net of bank and postal
charges and send their CAFs to the Registrar to the Issue by registered post. If any portion of the CAF is / are
detached or separated, such application is liable to be rejected.
Applications where separate cheques/demand drafts are not attached for amounts to be paid for Equity
Shares are liable to be rejected.
(a) Except for applications on behalf of the Central and State Government, the residents of Sikkim
and the officials appointed by the courts, all Investors, and in the case of application in joint
names, each of the joint Investors, should mention his / her PAN number allotted under the I.T.
Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered
incomplete and are liable to be rejected.
(b) Eligible Equity Shareholders, holding Equity Shares in physical form and Renouncees who are
not Eligible Equity Shareholders holding Equity Shares in demat form. Investors are advised that
it is mandatory to provide information as to their savings / current account number and the name
of the bank with whom such account is held in the CAF to enable the Registrar to the Issue to
print the said details in the refund orders, if any, after the names of the payees. Application not
containing such details is liable to be rejected.
(c) All payment should be made by cheque/demand draft only. Application through the ASBA
process as mentioned above is acceptable. Cash payment is not acceptable. In case payment is
effected in contravention of this, the application may be deemed invalid and the application
money will be refunded and no interest will be paid thereon.
(d) Signatures should be either in English or Hindi or in any other language specified in the Eighth
Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb
impression must be attested by a Notary Public or a Special Executive Magistrate under his / her
official seal. The Investors must sign the CAF as per the specimen signature recorded with our
Company and the Depositories.
(e) In case of an application under power of attorney or by a body corporate or by a society, a
certified true copy of the relevant power of attorney or relevant resolution or authority to the
signatory to make the relevant investment under this Issue and to sign the application and a copy
of the Memorandum and Articles of Association and / or bye laws of such body corporate or
society must be lodged with the Registrar to the Issue giving reference of the serial number of the
CAF. In case the above referred documents are already registered with our Company, the same
need not be a furnished again. In case these papers are sent to any other entity besides the
Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be
rejected. In no case should these papers be attached to the application submitted to the Bankers to
the Issue.
(f) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order
and as per the specimen signature(s) recorded with our Company. Further, in case of joint
Investors who are Renouncees, the number of Investors should not exceed three. In case of joint
383
Investors, reference, if any, will be made in the first Investor‟s name and all communication will
be addressed to the first Investor.
(g) Application(s) received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment
of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time
by the RBI under FEMA in the matter of refund of application money, Allotment of Equity
Shares, subsequent issue and Allotment of Equity Shares, interest, export of share certificates, etc.
In case a NR or NRI Investor has specific approval from the RBI, in connection with his
shareholding, he should enclose a copy of such approval with the CAF. Additionally, applications
will not be accepted from NRs/NRIs in the United States or its territories and possessions, or any
other jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be
restricted by applicable securities laws.
(h) All communication in connection with application for the Equity Shares, including any change in
address of the Investors should be addressed to the Registrar to the Issue prior to the date of
Allotment in this Issue quoting the name of the first/sole Investor, folio numbers and CAF
number. Please note that any intimation for change of address of Investors, after the date of
Allotment, should be sent to the Registrar and Transfer Agents of our Company, in the case of
Equity Shares held in physical form and to the respective depository participant, in case of Equity
Shares held in dematerialized form.
(i) SAFs cannot be re-split.
(j) Only the person or persons to whom Equity Shares have been offered and not Renouncee(s) shall
be entitled to obtain SAFs.
(k) Investors must write their CAF number at the back of the cheque / demand draft.
(l) Only one mode of payment per application should be used. The payment must be by cheque /
demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is
a member or a sub member of the Bankers Clearing House located at the centre indicated on the
reverse of the CAF where the application is to be submitted.
(m) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-
dated cheques and postal / money orders will not be accepted and applications accompanied by
such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will
not accept payment against application if made in cash. (For payment against application in cash
please refer point (e) above).
(n) No receipt will be issued for application money received. The Bankers to the Issue / Collecting
Bank / Registrar, as the case may be, will acknowledge receipt of the same by stamping and
returning the acknowledgment slip at the bottom of the CAF.
(o) The distribution of this Letter of Offer and issue of Equity Shares and Rights Entitlements to
persons in certain jurisdictions outside India may be restricted by legal requirements in those
jurisdictions. Persons in the United States and such other jurisdictions are instructed to disregard
this Letter of Offer and not to attempt to subscribe for Equity Shares.
384
(p) Investors shall be given an option to get the Equity Shares in demat or physical mode.
(q) Investors are requested to ensure that the number of Equity Shares applied for by them do not
exceed the prescribed limits under prescribed laws
Grounds for Technical Rejections
Investors are advised to note that applications are liable to be rejected on technical grounds, including the following:
Amount paid does not tally with the amount payable;
Bank account details (for refund) are not provided or available with the depositories or Registrar to the
Issue, as the case may be;
Age of Investor(s) not given (in case of renouncees);
Except for CAFs on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, PAN number not given for application of any value;
In case of CAF under power of attorney or by limited companies, corporate, trust, relevant documents
are not submitted;
If the signature of the Investor does not match with the one given on the CAF and for renounce(s) if
the signature does not match with the records available with their depositories;
CAFs are not submitted by the Investors within the time prescribed as per the CAF and the Letter of
Offer;
CAFs not duly signed by the sole / joint Investors;
CAFs by OCBs;
CAFs accompanied by Stockinvest;
In case no corresponding record is available with the Depositories that matches three parameters, (a)
names of the Investors (including the order of names of joint holders), (b) the DP ID and (c) the
beneficiary account number, then such applications are liable to be rejected.
CAFs that do not include the certifications set out in the CAF to the effect that, among other thing, the
subscriber is not located in the United States and is authorised to acquire the Rights Entitlements and
Equity Shares in compliance with all applicable laws and regulations;
CAFs which have evidence of being executed in/dispatched from the United States or any other
jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be restricted by
applicable securities laws;
CAFs by ineligible non-residents (including on account of restriction or prohibition under applicable
local laws) and where a registered address in India has not been provided;
CAFs where our Company believes that CAF is incomplete or acceptance of such CAF may infringe
applicable legal or regulatory requirements;
In case the GIR number is submitted instead of the PAN;
Application by persons not competent to contract under the Indian Contract Act, 1872, as amended,
except applications by minors having valid demat accounts as per the demographic details provided by
the Depositories;
Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.
Applications from QIBs and Non Institutional applicants or from Investors applying in this Issue for
Equity Shares for an amount exceeding `2,00,000, which are not in ASBA.
The application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied
for is more than ` 200,000 but has applied separately through split CAFs of less than ` 200,000 and
has not done so through the ASBA process; and
385
Application for Rights Entitlements or additional Equity Shares in physical form.
Please read the Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the
CAF. The instructions contained in the CAF are an integral part of the Letter of Offer and must be carefully
followed. The CAF is liable to be rejected for any non-compliance of the provisions contained in the Letter of Offer
or the CAF.
Investment by FIIs
In accordance with the current regulations, the following restrictions are applicable for investment by FIIs:
The Issue of Equity Shares under this Issue to a single FII should not exceed 10% of the post-issue paid up capital of
our Company. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts the investment on
behalf of each sub-account shall not exceed 10% of the total paid up capital of our Company.
Applications will not be accepted from FIIs in the United States or its territories and possessions, or any other
jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be restricted by applicable
securities laws.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number
CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Institutional applicants or are
applying in this Issue for Equity Shares for an amount exceeding `2,00,000 shall mandatorily make use of ASBA
facility.
Investment by NRIs
Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.
Applications will not be accepted from NRIs in the United States or its territories and possessions, or any other
jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be restricted by applicable
securities laws. Investors that are NRIs should note that Applications where a registered address is not provided in
india is liable to be rejected.
NRI Applicants may please note that only such Applications as are accompanied by payment in free foreign
exchange shall be considered for Allotment under the reserved category. The NRI Applicants who intend to make
payment through NRO accounts shall use the Application Form meant for resident Indians and shall not use the
Application Forms meant for reserved category.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number
CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Instutitional applicants or are
applying in this Issue for Equity
Shares for an amount exceeding `2,00,000 shall mandatorily make use of ASBA facility.
Procedure for Applications by Mutual Funds
A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and
such applications shall not be treated as multiple applications. The applications made by asset management
386
companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the
application is being made.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number
CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Institutional applicants or are
applying in this Issue for Equity Shares for an amount exceeding `2,00,000 shall mandatorily make use of ASBA
facility.
No Mutual Fund scheme may invest more than 10% of its net asset value in equity shares or equity related
instruments of any company, provided that the limit of 10% will not apply to investments in index funds or sector or
industry specific funds. No Mutual Fund under all its schemes may own over 10% of any company‟s paid-up share
capital carrying voting rights.
Investment by QFIs
In terms of circulars dated January 13, 2012, SEBI has permitted investment by QFIs in Indian equity issues,
including in rights issues. A QFI can invest in the Issue through its DP with whom it has opened a demat account.
No single QFI can hold more than 5% of paid up equity capital of the company at any point of time.
Further, aggregate shareholding of all QFIs shall not exceed 10% of the paid up equity capital of the Company at
any point of time.
Applications will not be accepted from QFIs in restricted jurisdictions.
QFI applicants which are QIBs or whose Application Money exceeds ` 2,00,000 can participate in the Issue only
through the ASBA process.
Impersonation
As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of sub-
section (1) of section 68A of the Companies Act which is reproduced below:
“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any
shares therein, or otherwise induces a Company to Allot, or register any transfer of shares therein to him, or any
other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five
years”.
Dematerialized dealing
Our Company has entered into agreements dated October 31, 2000 and September 14, 2000 with NSDL and CDSL,
respectively, and its Equity Shares bear the ISIN INE540B01015.
Payment by Stockinvest
In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated 5 November 2003, the Stockinvest
Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in this Issue.
Disposal of application and application money
387
No acknowledgment will be issued for the application moneys received by our Company. However, the Bankers to
the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the
acknowledgment slip at the bottom of each CAF.
The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and
in either case without assigning any reason thereto.
In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an
application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity
Shares allotted, will be refunded to the Investor within a period of 15 days from the Issue Closing Date. If such
money is not repaid within eight days from the day our Company becomes liable to repay it, our Company and every
Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally
liable to repay the money with interest as prescribed under Section 73 of the Companies Act.
For further instructions, please read the CAF carefully.
Utilisation of Issue Proceeds
Our Board of Directors declares that:
(i) All monies received out of this Issue shall be transferred to a separate bank account other than the
bank account referred to sub-section (3) of Section 73 of the Companies Act;
(ii) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in
the balance sheet of our Company indicating the purpose for which such monies have been utilised;
(iii) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate
separate head in the balance sheet of our Company indicating the form in which such unutilized
monies have been invested; and
(iv) Our Company may utilize the funds collected in the Issue only after the basis of Allotment is finalized.
Undertakings by our Company
Our Company undertakes the following:
1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and
satisfactorily.
2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock
exchanges where the Equity Shares are to be listed will be taken within seven working days of finalization of
basis of Allotment.
3. The funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be
made available to the Registrar to the Issue by our Company.
388
4. Our Company undertakes that where refunds are made through electronic transfer of funds, a suitable
communication shall be sent to the Investor within 15 days of the Issue Closing Date, giving details of the
banks where refunds shall be credited along with amount and expected date of electronic credit of refund.
5. Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer and
confirms that to the best of its knowledge and belief, there are no other facts the omission of which makes
any statement made in this Letter of Offer misleading and further confirms that it has made all reasonable
enquiries to ascertain such facts.
6. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to
non-ASBA applications while finalising the basis of Allotment.
7. At any given time there shall be only one denomination for the Equity Shares of our Company.
8. We shall comply with such disclosure and accounting norms specified by SEBI from time to time.
9. The certificates of the securities or refund orders to non-resident shareholders will be dispatched within
specified time
10. No further issue of securities shall be made till the securities offered through this Draft Letter of Offer are
listed or till the application moneys are refunded on account of non-listing, under-subscription, etc
Minimum Subscription
If our Company does not receive the minimum subscription of 90% of the Issue, our Company shall forthwith
refund the entire subscription amount received within 15 days from the Issue Closing Date. If such money is not
repaid within eight days from the day our Company becomes liable to repay it, (i.e. 15 days after the Issue Closing
Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) our Company and every Director of
our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to
repay the money with interest as prescribed under sub-section (2) and (2A) of Section 73 of the Companies Act.
Important
Please read this Letter of Offer carefully before taking any action. The instructions contained in the
accompanying CAF are an integral part of the conditions of this Letter of Offer and must be carefully
followed; otherwise the application is liable to be rejected.
All enquiries in connection with this Letter of Offer or accompanying CAF and requests for SAFs must be addressed
(quoting the Registered Folio Number/ DP and Client ID, the CAF number and the name of the first Eligible Equity
Shareholder as mentioned on the CAF and super scribed „[●] Rights Issue‟ on the envelope and postmarked in India)
to the Registrar to the Issue at the following address:
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Tel: +91 22 2596 7878
Toll-free: 1-800-22-0878
Facsimile: +91 22 2596 0329
389
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR 0000 04058
It is to be specifically noted that this Issue of Equity Shares is subject to the risk factors mentioned in
the section entitled “Risk Factors” at page 11.
The Rights Entitlement and the Equity Shares are not intended to be offered or sold to persons in the
United States or any other jurisdiction where such offer or sale may be prohibited. The offering to
which this Letter of Offer relates is not, and under no circumstances is to be construed as, an offering
of any shares or rights to sale in the United States, the territories or possessions thereof, or a
solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Letter of Offer
and the CAF should not be dispatched or forwarded to or transmitted in or to, the United States at any
time. Our Company and the Lead Manager reserve absolute discretion in determining whether to allow
such participation as well as the identity of the persons who may be allowed to do so. Any person who
acquires Rights Entitlements or Equity Shares will be deemed to have declared, warranted and agreed,
by accepting the delivery of the Letter of Offer, that it is not and that at the time of subscribing for the
Equity Shares or the Rights Entitlements, it will not be, in the United States or any other jurisdiction
where such acquisition may be prohibited.
THE ISSUE WILL REMAIN OPEN FOR A MINIMUM 15 DAYS. HOWEVER, THE BOARD WILL
HAVE THE RIGHT TO EXTEND THE ISSUE PERIOD AS IT MAY DETERMINE FROM TIME TO
TIME BUT NOT EXCEEDING 30 DAYS FROM THE ISSUE OPENING DATE
390
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of India
and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign
investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which
such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely
permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the foreign
investor is required to follow certain prescribed procedures for making such investment. The government bodies
responsible for granting foreign investment approvals are FIPB and RBI.
Subscription by foreign investors (NRIs/FIIs)
FIIs are permitted to subscribe to shares of an Indian company in a public offer without the prior approval of the
RBI, so long as the price of the equity shares to be issued is not less than the price at which the equity shares are
issued to residents.
The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB
or the RBI, provided that (i) the activities of the investee company are under the automatic route under the foreign
direct investment (“FDI”) Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011 (ii) the non-resident shareholding is within the sectoral limits under the
FDI policy; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI.
As per the existing policy of the Government of India, OCBs cannot participate in this Issue.
391
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION
Capitalised terms used in this section have the meaning that has been given to such terms in the Articles of
Association of our Company. Pursuant to Schedule II of the Companies Act and the ICDR Regulations, the main
provisions of the Articles of Association of our Company are detailed below:
The regulations contained in Table 'A' in Schedule I of the Companies Act, 1956, shall not apply to our Company on
its registration, but instead thereof regulations contained in these Articles shall apply.
Capital
Article 3 provides that “The Authorised Capital of the Company shall be as per Capital Clause of the Memorandum
of Association of the Company with power to increase, reduce, divide and/or sub-divide the Share Capital or
reclassify them into several classes and attach thereto respectively such preferential, priority, deferred, qualified or
special rights, privileges, conditions or restrictions, whether in regard to dividend, voting, return of capital,
distribution of assets or otherwise, as may be determined in accordance with the laws, rules and regulations
applicable to the Company and to vary, modify or abrogate such rights, privileges, conditions or restrictions in such
manner as may from time to time be provided by the regulations/resolutions of the Company or are provided for in
the Articles of Association of the Company and to consolidate or sub-divide or re-organise shares or issue shares of
higher or lower denominations..”
Article 4 provides that “Such shares of the authorised capital to carry such rights, privileges and conditions attached
thereto as are provided by the regulations of the Company for the time being and with the power to increase and
reduce the Share Capital of the Company and to divide the Shares in the Capital for the time being into several
classes and to attach thereto respectively such preferential rights, privileges or conditions as may be determined by
or in accordance with the regulations of the Company and to vary, modify or abrogate any such rights, privileges or
conditions in such manner as may for the time being be provided by the regulations of the Company. The rights of
the preference shares shall be determined at the time of issue thereof.”
Increase of Capital by the Company at how carried into effect
Article 5 provides that “The Company may in General Meeting, from time to time by ordinary resolution, increase
its capital by creation of new shares which may be unclassified and may be classified at the time of issue in one or
more classes and of such amount or amounts as may be deemed expedient. The new shares shall be issued upon such
terms and conditions with such rights and privileges annexed thereto as the resolution shall be prescribed and in
particular, such shares may be issued with a preferential or qualified right to dividends and in the distribution of
assets of the Company and with a right of voting at General Meeting of the Company in conformity with Section 87
and 88 of Act, Whenever the Capital of the Company has been increased under the provisions of this Article, the
Directors shall comply with the provisions of Section 97 of the Act.”
Article 5a provides that “The Company may by special resolution, reduce or adjust in any manner, subject to any
authorizations and approvals required by Law-
(a) its Share Capital
(b) any Capital Redemption Reserve Account
(c) any Securities Premium Account
Notwithstanding the above any amounts standing to the credit of Securities Premium Account may also be utilized
other than for capitalization, for any other purposes as are in accordance with the provisions of law.”
Redeemable Preference Shares
Article 7 (1) provides that “Subject to the provision of Section 80 of the Act, the Company shall have the power to
issue preference shares which are or at the option of the Company are liable to be redeemed in accordance with
Section 80A of the Act and the resolution authorizing such issue shall prescribe the manner, terms and conditions of
392
redemption.”
Further Issue of Capital
Article 8(a) provides that “The Company shall have right to issue further shares in accordance with the provision of
Section 81 of the Act.”
Sub-division, consolidation and cancellation of Shares
Article 8(b) provides that “Subject to the provisions of Section 94 and other applicable provisions of the Act, the
Company in General Meeting may, from time to time, sub-divide or consolidate its shares or any of them and the
resolution where by any share is sub-divided may determine that, as between the holders of the shares resulting
from such sub-division one or more of such shares shall have same preference or special advantage as regards
dividend, capital or otherwise over or as compared with the other or other subject as aforesaid, the Company in
General Meeting may also cancel shares which have not been taken or agreed to be taken by any person and
diminish the amount of its share capital by the amount of the shares so cancelled.”
Modification of rights
Article 9 provides that “Wherever the capital, by reason of the issue of the preference shares or otherwise is
divided into different classes of shares, all or any of the rights and privileges attached to each class may, subject to
the provisions of sections 106 and 107 of the Act, be modified, commuted, affected, abrogated, dealt with or
varied with the consent in writing of the holders, of not less than three fourth of the issues capital of that class or
with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class
and all the provisions hereinafter contained as to general meeting shall mutatis mutandis apply to every such
meeting. This Article is not to derogate from any power the Company would have if this Article was omitted.
The rights conferred upon the holders of the shares (including preference shares if any) of any class issued with
preferred or other rights or privileges shall unless otherwise expressly provided by the terms of issue of shares of
that class, be deemed not to be modified, commuted, affected, abrogated dealt with or varied by the creation of
issue of further shares ranking pari passu therewith.”
Beneficial Owner (Including Depository)
Article 12 provides that “Save as herein otherwise provided, the Company shall be entitled to treat the person
whose name appears on the Register of Members as the holder of any share or whose name appears as the
beneficial owner of shares in the records of the depository, as the absolute owner thereof and accordingly shall not
except as ordered by a court of competent jurisdiction or as by law require, be bound to recognize any benami
trust or equity or equitable, contingent, future or partial or other claim or claims or right to or interest in such
share on the part of any other person whether or not it shall have express or implied notice thereof.
No Notice of any trust, express, implied or constructive shall be entered in the Register of Members or of
debenture holders.”
The Board may issue shares as fully paid-up
Article 14 provides that “Subject to the provisions of the Act and these Articles, the Board may allot and issue
shares in the Capital of the Company as payment of any property sold or transferred or for services rendered to the
Company in the conduct of its business or in satisfaction of any shares, which may be so issued shall be deemed to
be fully paid-up or partly paid-up shares.”
Acceptance of shares
Article 15 provides that “Any application signed by or on behalf of an applicant for shares in the Company
followed by an allotment of any share therein, shall be an acceptance of shares within the meaning of these
393
Articles and every person who thus or otherwise accepts any shares and whose name is therefore placed on the
register shall, for the purpose of this Articles, be a member.”
Deposit and Call etc. to be a debt payable
Article 16 provides that “The money, if any, which the Board of Directors shall on the allotment of any shares
being made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of any shares
allotted by them shall immediately on the inscription of the name of the allotted in the register of members as the
name of the holder of such shares, become a debt due to and recoverable by the Company from the allotted thereof
and shall be paid by him accordingly.”
Liability of Members
Article 17 provides that “Every member or his heirs, executors or administrators to the extent of his assets which
come to their hands shall be liable to pay of the Company the portion of the capital represented by his shares or
shares which may, for the time being remain unpaid thereon in such amount at such time or times and in such
manner as the Board of Directors shall from time to time, in accordance with the Company‟s requisitions, require
or fix for the payment thereof.”
Share Certificate
Article 18 provides that “(a) Every member or allottee of shares shall be entitled, without payment to receive one
certificate for all the shares of the same class registered in his name. Every share certificate shall specify the name
of the person in whose favour it is issued, the share certificate number and the distinctive number(s) of the shares
to which it relates and the amount paid up thereon. Such certificate shall be issued only in pursuance of resolution
passed by the Board and on surrender to the Company of its letter of allotment or its fractional coupons of
requisite value, save in cases of issues, against letters of acceptance or of renunciation or in cases of issue of
bonus shares PROVIDED THAT if the letter of allotment is lost or destroyed, the Board may impose such
reasonable terms, if, any as it think fit, as to evidence and indemnity and the payment of out of pocket expenses
incurred by the Company in investigating the evidence. If any member shall require additional certificate he shall
pay for each additional certificate (not being in the marketable lot) such sum not exceeding One Rupee as the
Directors shall determine. The certificates of title to shares shall be issued under the seal of the Company and
shall be signed in conformity with the provisions of the Companies (Issue of Share Certificates) Rules, 1960 or
any statutory modification or re-enactment thereof for the time being in force. Printing of blank forms to be used
for issue of share certificates and maintenance of books and documents relating to issue of Share Certificate shall
be in accordance with the provisions of the aforesaid rules. Such certificates of title to shares shall be completed
and kept ready for delivery within three months after the allotment and within one month after the application for
the registration of the transfer of any such shares unless the conditions of issue of share provide otherwise.
(b) Any two or more joint allottee or holders of shares shall, for the purpose of this Article, be treated as a single
member and the certificate of any share which may be the subject of joint ownership may be delivered to any one
of such joint owners on behalf of all of them.
(c) Provided, however, that no share certificate (s) shall be issued in respect of shares held in Depository.”
Renewal of Shares Certificate
Article 19 provides that “No Certificate of any share or share shall be issued either in exchange for those which are
sub-divided or consolidated or in replacement of those which are defaced, torn or old, decrepit, worn out or where
the pages on the reverse for recording transfer have been duly utilized unless the certificate in lieu of which it is
issued is surrendered to the Company.
PROVIDED THAT no fees shall be charged for issue of new certificates in replacement of those which are old,
decrepit or worn out or where the pages on the reverse for recording transfer have been fully utilized.
394
In case of rematerialisation of shares, procedure thereof as may be prescribed under law, shall be followed.”
Dematerialisation of shares
Article 21 provides that “The Company shall be entitled to dematerialize its existing shares, debentures and other
securities, rematerialize its shares, debentures and other securities held in Depositories and other securities, in a
dematerialized form pursuant to the Depositories Act,1996 and the rules, bye laws, regulations framed thereunder,
if any.”
Company not bound to recognize any interest in share other than of registered holder
Article 22 provides that “Except as ordered by a Court of Competent jurisdiction or as by law required, the
Company shall not be bound to recognize, even when having notice thereof, any equitable, contingent, future or
partial interest in any share of (except only as is by these Articles otherwise expressly provided) any right in
respect of a share other than an absolute right thereto, in accordance with these Articles, of the person from time to
time registered as holder thereof but the Board shall be at liberty at their sole discretion to register any share in the
joint names of any two or more persons (but not exceeding 4 persons) or the survivor or survivors of them.”
Trust not recognized
Article 23 provides that “(a) Save as herein otherwise provided, the Company shall be entitled to treat the person
whose name appears on the Register of Members as the holder of any share as the absolute owner thereof and
accordingly shall not ( except as ordered by a Court of Competent jurisdiction or as by law required) be bound to
recognize any benami, trust or equity or equitable, contingent, future or partial or other claim or claim s or rights to
or interest in such share in the part of any other person whether or not it shall have express or limited notice
thereof. The provisions of Section 153 of the Act, shall apply.
(b) Shares may be registered in the name of an incorporated Company or other body corporate but not in the name
of a minor (except in case where they are fully paid) or in the name of a person of unsound mind or in the name of
any firm or partnership.”
Calls
Directors may make call
Article 28 provides that “(a)Subject to the provisions of Section 91 of the Act the Board of Directors may, from
time to time by a Resolution passed at a meeting of a Board ( and not be a circular resolution) make such calls as it
think fit upon the members in respect of all moneys unpaid on the shares whether on account of the nominal value
of the shares or by way of premium, held by them respectively and not be conditions of allotment thereof made
payable at fixed time and each member shall pay the amount of every calls so made payable at fixed time and
each member shall pay the amount of every call so made on him to the person or person and at the times and
places appointed by the Board of Directors. A call may be made payable by installments. A call may be
postponed or revoked as the Board may determine.
Liability of joint-holders
Article 28 provides that “(b) The joint holders of a share shall be jointly and severally liable to pay all calls in
respect thereof.”
Notice or calls
Article 29 provides that “Not less than thirty days notice in writing of any calls shall be given by the Company
specifying the time and place of payment and the person or persons to whom such calls shall be paid.”
When call deemed to have been made
395
Article 30 provides that “A call shall be deemed to have been made at the time when the resolution authorizing
such call was passed at a meeting of the Board of Directors and may be made payable to the members on such date
or at the discretion of the Directors on such subsequent date as shall be fixed by the Board of Directors.”
Evidence in action by Company against shareholders.
Article 34 provides that “On the trial or hearing of any action or suit brought by the Company against any member
or his legal representative for the recovery of any moneys claimed to be due to the Company in respect of his
shares it shall be sufficient to prove that the name of the members in respect of whose shares the money is sought
to be recovered and entered on the register of member as the holder or as one of the holders at or subsequent to the
date at which in money sought to be recovered is alleged to have become due on the shares in respect of which the
money is sought to be recovered that the resolution making the call is duly recorded in the minute book and the
notice of such call was duly given to the member or his legal representative sued in pursuance of these Articles
and it shall not be necessary to prove the appointment of Directors who made such call, not that a quorum of
Directors was present at the Board at which any call was made not that the meeting at which any call was made
was duly convened or constituted nor any other matter whatsoever but the proof of the matters aforesaid shall be
conclusive evidence of the debt.”
Lien
Partial payment not to preclude forfeiture
Article 36 provides that “Neither the receipt by the Company of a portion of any money which shall, from time to
time, be due from any member to the Company in respect of his shares, either by way of principal or interest of
any indulgence granted by the Company in respect of the payment of such money, shall preclude the Company
from thereafter proceeding to enforce a forfeiture of such shares as hereinafter provided.”
Company to have lien on shares
Article 37 provides that “The Company shall have a first and paramount lien upon all shares (other than fully paid
up shares registered in the name of each member whether solely or jointly with others) and upon the proceeds of
sale thereof, for all moneys (whether presently payable or not), called or payable at a fixed time in respect of such
shares and no equitable interests in any share shall be created except upon the footing and condition that this
Article is to have full legal effect. Any such lien shall extend to all dividends from time to time declared in respect
of shares, PROVIDED THAT the Board of Directors may, at any time, declare any share to be wholly or in
exempt from the provisions of this Article.”
As to enforcing lien by sale
Article 38 provides that “The Company may sell, in such manner as the Board thinks, fit, any shares on which the
Company has a lien for the purpose of enforcing the same PROVIDIED THAT no sale shall be made:
(a) Unless a sum in respect of which the lien exists is presently payable or
(b) Until the expiration of fourteen days after a notice in writing starting and demanding payment of such part of
the amount in respect of which the lien exists as is presently payable has been given to the registered holder for the
time being of the share or the person entitled thereto by reason of his death or insolvency.
For the purposes of such sale, the Board may cause to be issued a duplicate certificate in respect of such shares and
may authorize one of their members to execute a transfer thereof on behalf of and in the name of such members.
(c) The purchaser shall not be bound to see the application of the purchase money nor shall his title to the shares
be affected by any irregularity or invalidity in the proceedings in reference to the sale.”
396
Application of proceeds of sale
Article 39 provides that “(a)The net proceeds of any such sale shall be received by the Company and applied in or
towards satisfaction of such part of the amount in respect of which the lien exists as is presently payable; and
(b) The residue, if any, after adjusting costs and expenses, if any, incurred shall be paid to the person entitled to the
shares at the date of the sale (subject to a like lien for sums not presently payable existed on the shares before the
sale.)”
Forfeiture of Shares
If money payable on share not paid notice to be given
Article 40 provides that “If any member fails to pay the whole or any part of any call or any installment of a call
on or before the day appointed for the payment of the same or any such extension thereof, the Board of Directors
may, at any time thereafter, during such time as the call for installment remains unpaid, give notice to his requiring
him to pay the same together with any interest that may have accrued and all expenses that may have been
incurred by the Company by reason of such non-payment.”
In default of payment shares to be forfeited
Article 43 provides that “If the requirements of any such notice as aforesaid are not complied with any share or
shares in respect of which such notice has been given may at any time thereafter before payment of all calls or
installments, interests and expenses due in respect thereof, be forfeited by a resolution of the Board of Directors to
that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the
forfeited shares and not actually paid before the forfeiture.”
Notice of forfeiture to a member
Article 44 provides that “When any share shall have been so forfeited, notice of the forfeiture shall be given to the
member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture, with the date
thereof, shall forthwith be made in the Register of Members, but no forfeiture shall be in any manner invalidated
by any omission or neglect to give such notice or to make any such entry as aforesaid.”
Forfeited share to be the property of the Company and may be sold etc.
Article 45 provides that “Any share so forfeited, shall be deemed to be the property of the Company and may be
sold, re-allotted or otherwise disposed off, either to the original holder or to any other person upon such terms and
in such manner as the Board of Directors shall think fit.
Member still liable to pay money owing at the time of forfeiture and interest
Article 46 provides that “Any member whose shares have been forfeited shall notwithstanding the forfeiture be
liable to pay and shall forthwith pay to the Company on demand all calls, installments, interest and expenses
owing upon or in respect of such shares at the time of the forfeiture together with interest thereon from the time of
the forfeiture until payment, at such rate not exceeding eighteen percent per annum as the Board of Directors may
determine and the Board of Directors may enforce the payment of such moneys or any part thereof, if it thinks fit,
but shall not be under any obligation to do so.”
Effect of forfeiture
Article 47 provides that “The forfeiture of a share shall involve the extinction at the time of the forfeiture of all
interest in and all claims and demand against the Company in respect of the share and all other rights incidental to
the share, except only such to those rights as by these Articles are expressly saved.”
397
Power to annual forfeiture
Article 48 provides that “The Board of Directors may at any time before any share so forfeited shall have been
sold, re-allotted or otherwise disposed off, annul the forfeiture thereof upon such conditions as it thinks fit.”
Cancellation of share certificate in respect of forfeited shares
Article 51 provides that “Upon sale, re-allotment or other disposal, under the provisions of these Articles, the
certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand
by the Company have been previously surrendered to it by the defaulting member) stand cancelled and become
null and void and of no effect and the Directors shall be entitled to issue a new certificate or certificates in respect
of the said shares to the person of persons entitled thereto.”
Surrender of Shares
Article 54 provides that “The Directors may, subject to the provisions of the Act, accept a surrender of any share
from any member desirous of surrendering on such terms and condition as they think fit.”
Transfer and Transmission of Shares
Article 55 provides that “The Company shall keep a book to be called “Register of Transfer‟ and therein shall be
fairly and distantly entered particulars of every transfer or transmission of any share held in a material form.”
Article 56 provides that “In the case of transfer or transmission of shares or other marketable securities where the
Company has not issued any certificates and where such shares or securities are being held in an electronic and
fungible form in a Depository, the provisions of the Depositories Act, 1996 shall Apply.”
Form of transfer
Article 57 provides that “The instrument of transfer of any share shall be in the prescribed form under the
Companies (Central Government) General Rules and Forms, 1956 and in accordance with the requirements of
Section 108 of the Act.”
Transfer to be presented with evidence of title
Article 59 provides that “Every instrument of transfer shall be presented to the Company duly stamped for
registration accompanied by such evidence as the Board may required to prove the tile of the transferor, his right
to transfer the shares and generally under the subject to such conditions and regulations as the Board may, from
time to time, prescribe and every registered instrument of transfer shall remain in the custody of the Company until
destroyed by order of the Board. In case of securities being dematerialized, procedure as applicable to demat, to be
followed.”
Nomination facility
Article 61 provides that “(1) Every holder of shares in, or holder of debentures of, a Company may, at any time
nominate, in the prescribed manner, a person to whom his shares in, or debentures of, the Company shall vest in
the event of his death.
(2) Where the shares in, or debentures of, a Company are held by more than one person jointly, the joint holders
may together nominate, in the prescribed manner, a person to whom all the rights in the shares or debentures of the
Company shall vest in the event of death of all the joint holders.
(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether
testamentary or otherwise, in respect of such shares in, or debentures of, the Company, where a nomination made
in the prescribed manner purports to confer on any person the right to vest the shares in or debentures of the
398
Company, the nominee shall, on the death of the share holder or holder of debentures of the Company or, as the
case may be, on the death of the joint holders become entitled to all the rights in the shares or debentures of the
Company or, as the case may be, all the joint holders, in relation to such shares in, or debentures of the Company
to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
(4) Where the nominee is a minor, it shall be lawful for the holder of the shares or holder of debentures, to make
the nomination to appoint in the prescribed manner any person to become entitled to shares in or debentures of the
Company, in the event of his death, during the minority.”
Transmission of shares
Article 62 provides that “(1) Any person who becomes a nominee by virtue of the provisions of section 109A,
upon the production of such evidence as may be required by the Board and subject as hereinafter provided, elect,
either.
(a) to be registered himself as holder of the share of debenture, as the case may be ; or
(b) to make such transfer of the share or debenture , as the case may be, as the deceased shareholder or debenture
holder, as the case may be, could have made.
(2) The Board shall, in either case, have the same right to decline or suspend registration, as it would have had, if
the deceased shareholder or debenture holder, as the case may be, had transferred the share of debenture, as the
case may be, before his death.
(3) If the person being a nominee, so becoming entitled, elects to be registered as holder of the share or debenture,
as the case may be, himself, he shall deliver or send to the Company a notice in writing signed by him stating that
he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder or
debenture holder, as the case may be.
(4) All the limitations, restrictions and provisions of this Act relating to the right to transfer and the registration of
the transfers of shares or debentures shall be applicable to any such notice of transfer as aforesaid as if the death of
the member had not occurred and the notice of transfer were a transfer signed by that shareholder or debenture
holder, as the case may be.
(5) A person, being a nominee, becoming entitled to a share or debenture by reason of the death of the holder shall
be entitled to the same dividends and other advantages to which he would be entitled if he were the registered
holder of the share or debenture except that he shall not, before being registered a member in respect of his share
or debenture, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of
the Company.
Provided that the Board may, at time, give notice requiring any such person to elect either to be registered himself
or to transfer the share or debenture, and if the notice is not complied with within ninety days, the Board may
thereafter with hold payment of all dividends, bonuses or other moneys payable in respect of the share or
debenture, until the requirements of the notice have been complied with.”
Buy Back of securities
Article 63 provides that “The Company shall have the power subject to and in accordance with all other applicable
provisions of the Act to purchase any of its own shares, whether or not they are redeemable, at such rate(s) and to
keep them alive and/or reissue from time to time such number(s) of shares, purchased at such rate (s) and on such
terms and conditions as the Board may deem fit and appropriate.
Except to the extent permitted by Section 77 or other applicable provisions (if any) of the Act, the Company shall
not give whether directly or indirectly and whether by means of a loan, guarantee, provisions of security or
otherwise any financial assistance for the purpose of, or in connection with the purchase or subscription made or to
be made by any person of or for any shares in the Company.”
399
Power of Company to purchase its own securities.
Article 64 provides that “(1) The Company may purchase its own shares or other specified securities (hereinafter
referred to as “buy-back”) out of –
(i) its free reserves; or
(ii) the securities premium account ; or
(iii) the proceeds of any shares or other specified securities
However, no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an
earlier issue of the same kind of shares or same kind of other specified securities.
(2) The company shall not purchase its own shares or other specified securities under sub-section (1) unless –
(a) a special resolution has been passed in general meeting of the company authorising the buy back;
(b) the buy-back does not exceed twenty five percent of the total paid-up capital and free reserves of the company.
However the buy-back of the equity shares in any financial year shall not exceed twenty five percent of its total
paid-up equity capital in that financial year;
(c) the ratio of the debt owed by the company is not more than twice the capital and its free reserves after such
buy-back or such other ratio as the Central Government may prescribe.
(d) all the shares or other specified securities for buy-back are fully paid-up;
(3) The notice of the meeting at which special resolution is proposed to be passed shall be accompanied by an
explanatory statement stating -
(a) a full and complete disclosure of all material facts;
(b) the necessity for the buy-back;
(c) the class of security intended to be purchased under the buy-back;
(d) the amount to be invested under the buy-back; and
(e) the time limit for completion of buy-back.
(4) Every buy-back shall be completed within twelve months from the date of passing the special resolution under
clause (b) of sub-section (2).
(5) The buy-back under sub-section (1) may be
(a) from the existing security holders on a proportionate basis; or
(b) from the open market; or
(c) from old lots, that is to say, where the lot of securities is listed public company, whose shares are listed on a
recognized stock exchange, is smaller than such market lot, as may be specified by the stock exchange; or
(d) by purchasing the securities issued to employees of the company pursuant to a scheme of stock option or sweat
equity.
400
(6) Where the company has passed a special resolution under sub-clause (b) if Clause (2) to buy-back its own
shares or other securities under this section, it shall, before making such purchases, file with the Registrar and the
Securities and Exchange Board of India a declaration of solvency in the form prescribed, verified an affidavit to
the effect that the Board has made a full inquiry into the affairs of the company as a result of which it is capable
of meeting its liabilities and will not be rendered insolvent within period of one year of the date of declaration
adopted by the Board, and signed by at least two directors of the company, one of whom shall be the managing
director, if any:
However the company shall file no declaration of solvency with the Securities and Exchange Board of India so
long its share is not listed on any recognized stock exchange.
(7) Where the company buys-back its own securities, it shall extinguish and physically destroy the securities so
bought-back within seven days of the last date of completion of buy-back.
(8) Where the company completes a buy-back of its shares or other securities, it shall not make further issue of the
same kind of shares (including allotment of further shares under clause (a) of sub-section (1) of section 81) or
other specified securities within a period of twenty-four months except by way of bonus issue or in the discharge
of subsisting obligations such as conversion of warrants, stock option schemes sweat equity or conversion of
preference shares or debentures into equity shares.
(9) Where the company buys-back its securities under this section, it shall maintain a register of the securities so
bought, the consideration paid for the securities bought-back the date of cancellation of securities, the date of
extinguishing and physically destroying of securities and such other particulars as may be prescribed.
(10) The company shall, after the completion of the buy-back under this section, file with the Registrar and the
Securities and Exchange Board of India, a return containing such particulars relating to the buy-back within thirty
days of such completion, as may be prescribed.
However no return shall be filed with the Securities and Exchange Board of India as long as the shares of the
Company are not listed on any recognised stock exchange.
Transfer of certain sums to capital redemption reserve account
Article 65 provides that “Where the company purchases its own shares out of free reserves, then sum equal to the
nominal value of the share so purchased shall be transferred to the capital redemption reserve account referred to
in clause (d) of the provision to sub-section (1) of section 80 and details of such transfer shall be disclosed in the
balance-sheet.”
Prohibition for buy-back in certain circumstances
Article 66 provides that (1) The Company shall not directly or indirectly purchase its own shares or other specified
securities –
(a) through any subsidiary company including its own subsidiary companies; or
(b) through any investment company or group of investment company; or
(c) if a default, in repayment of deposit, redemption of debenture of preference shares or payment of dividend to
any share holder or repayment of a term loan or interest payable thereon to any financial institution or bank is
subsisting.
(2) The company shall not directly or indirectly purchase its own shares or other specified securities in case such
company has not complied with provisions of Section 159, 207 and 211.
401
Issue of sweat equity shares
Article 67 provides that “(1) The company may issue sweat equity shares of a class of shares already issued if the
following conditions are fulfilled, namely:
(a) the issue of sweat equity shares is authorised by a special resolution passed by the company in the general
meeting;
(b) the resolution specifies the number of shares, current market price, consideration if any, and the class or
classes of directors or employees to whom such equity shares are to be issued;
(c) not less than one year has at the date of the issue elapsed since the date on which the company was entitled to
commence business
(d) the sweat equity shares of a company whose shares are listed on a recognised stock exchange are issued in
accordance with the regulations made by the Securities Exchange Board of India in this behalf.
However, so long as the equity shares of the Company are not listed on any recognized stock exchange, the sweat
equity shares are to be issued in accordance with the guidelines as may be prescribed.
(2) All the limitations, restrictions and provisions relating to equity shares shall be applicable to such sweat equity
shares issued under clause (1).”
Power to issue share warrants
Article 68 provides that “The Company may issue warrants subject to and in accordance with the provisions of
Section 114 and 115 of the Act and accordingly the Board may in its discretion with respect to any share which is
fully paid upon application in writing signed by the persons registered as holder of the share and authenticated by
such evidence (if any) as the Board may, from time to time, require as to the identity of the person signing the
application and on receiving the certificates (if any) of the share and the amount of the stamp duty on the warrant
and such fee as the Board may, from time to time, require, issue a share warrant.”
Deposit of Share Warrants
Article 69 provides that “(a) The bearer of a share warrant may, at any time, deposit the warrant at the office of the
Company and so long as the warrant remains so deposited, the depositor shall have the same right of signing a
requisition for calling a meeting of the Company and of attending and voting and exercising the other privileges of
the member at any meeting held after the expiry of two clear days from the time of deposit, as if his name were
inserted in the Register of Members as the holder of the share included in the deposit warrant.
(b) Not more than one person shall be recognized as depositor of the share warrant.
(c) The Company shall, on two days‟ written notice, return the deposited share warrant to the depositor;”
Privileges and disabilities of the holders of share warrant
Article 70 provides that “(a) Subject as herein otherwise expressly provided, no person shall as bearer of a share
warrant, sign a requisition for calling a meeting of the Company or attend or vote or exercise any other privileges
of a member at a meeting of the Company or be entitled to receive any notice from the Company.
(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if
he were named in the Register of members as the Holder of the Share included in the warrant and he shall be a
member of the Company.”
Issue of new share warrant or coupon
402
Article 71 provides that “The Board may, from time to time, make bye-laws as to the terms on which (if it shall
think fit), a new share warrant or coupon maybe issued by way of renewal in case of defacement, loss or
destruction.”
Conversion of Shares into Stock and reconversion
Article 72 provides that “Share may be converted into stock
The Company may, by Ordinary Resolution:
(a) convert any paid up share into stock; and
(b) reconvert any stock into paid-up shares of any denomination.”
Transfer of Stock
Article 73 provides that “The several holders of such stock may transfer their respective interest therein or any
part thereof in the same manner and subject to the same regulations under which the stock arose might, before the
conversion, have been transferred or as near thereto as circumstances admit.
PROVIDED THAT the Board may, from time to time, fix the minimum amount of stock transferable, so however
that such minimum shall not exceed the nominal amount of the shares from which the stock arose.”
Right of stockholders
Article 74 provides that “The holders of stock shall, according to the amount of stock held by them, have the same
right, privileges and advantages as regards dividends, voting at meeting of the Company and other matters, as if
they held shares from which the stock arose, but no such privilege or advantage (except participation in the
dividends and profits of the Company and in the assets on winding up) shall be conferred by an amount of stock
which would not, if existing in shares, have conferred those privileges or advantages.”
Power of Borrow
Article 76 provides that “Subject to the provisions of Section 58A, 292 and 293 of the Act and of these Article, the
Board of Directors may, from time to time at its discretion by a resolution passed at a meeting of the Board,
borrow, accept, deposits from members either in advance of calls or otherwise and generally raise or borrow or
secure the payment of any such sum or sums of money for the purpose of the Company from any source.
PROVIDED THAT, where the moneys to be borrowed together with the moneys already borrowed (apart from
temporary loans obtained from the Company‟s bankers in the ordinary course of business) exceeds the aggregate
of the paid up capital of the Company and its free reserves (not being reserves set apart for any specific purpose)
the Board of Directors shall not borrow such money without the sanction of the Company in general meeting. No
debt incurred by the Company in excess of the limit imposed by this Article shall be valid or effectual unless the
lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by this Article
had been exceeded.”
The payment or repayment of money borrowed
Article 77 provides that “The payment or repayment of moneys borrowed as aforesaid may be secured in such
manner and upon such terms and conditions in all respects as the Board of Directors may think fit and in particular
in pursuance of a resolution passed at a meeting of the Board(and not by circular Resolution) by the issue of
bonds, debentures or debenture-stock of the Company, charged upon all or any part of the property of the
Company, (both present and future) including its uncalled capital for the time being and the debentures and the
debenture-stock and other securities may be made assignable free from any equities between the Company and the
person to whom the same may be issued.”
403
Term of issue of debenture
Article 78 provides that “Any debentures, debenture-stock or other securities may be issued at a discount,
premium or otherwise and may be issued on condition that they shall be convertible into share of any
denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares,
attending (but not voting) at General Meeting, appointment of Directors and otherwise, debentures with the right
to conversion into or allotment of shares shall be issued only with the consent of the Company in General Meeting
by a Special Resolution.”
Mortgage of uncalled capital
Article 79 provides that “If any uncalled capital of the company is included in or charged by an mortgage or other
security, the Directors may, subject to the provisions of the Act and these Articles, make calls on the members in
respect of such uncalled capital in trust for the person in whose favour such mortgage or security executed.”
Statutory Meeting
Article 80 provides that “The Statutory Meeting shall be held in accordance with the provisions of Section 165 of
the Act within a period of not less than one month and not more than six months from the date on which the
Company shall be entitled to commence business.”
Annual General Meeting
Article 81 provides that “The Company shall in each year hold a General Meeting as its Annual General Meeting
in addition to any other Meeting in that year. All General Meetings other than Annual General Meetings shall be
called Extra-ordinary General Meetings. An Annual General Meeting of the company shall be held within six
months after the expiry of each financial year, provided that not more than fifteen months shall lapse between the
date of the Annual General Meeting and that of next. Nothing contained in the foregoing provision shall be taken
as affecting the right conferred upon the Registrar under the provisions of section 166 (1) of the Act to extend the
time within which any Annual General Meeting may be held. Every Annual General Meeting shall be called for a
time during business hours, on a day that is not a public holiday and shall be held at the office of the company or at
some other place within the city in which the Registered Office of the Company is situated as the Board may
determine and the notices calling the Meeting specify as the Annual General Meeting. The company may in any
one Annual General Meeting fix the time for its subsequent Annual General Meeting. Every member of the
company shall be entitled to attend either in person or by proxy and the Auditors of the company shall have the
right to attend and to be heard at any General Meeting, which he attends on any part of the business, which
concerns him as Auditor. At every Annual General Meeting of the company there shall be laid on the table the
Director‟s Report and Audited Statement of Accounts, the Proxy Register with proxies and the Register of
Director‟s Share holding which Register shall remain open and accessible during the continuance of the Meeting.”
Extra-ordinary General Meeting
Article 83 provides that “All General Meetings other than Annual General Meetings shall be called Extra-ordinary
General Meetings.”
Requisitionists‟ Meeting
Article 84 provides that “(1) Subject to the provisions of Section 188 of the Act, the Directors shall on the
requisition in writing of such number of members as hereinafter specified and (unless the General Meeting
otherwise resolves) at the expense of requisitionists:
(a) give to the members of the Company entitled to receive notice of the next Annual General Meeting, notice of
any resolution, which may properly be moved and is intended to be moved at the meeting.
404
(b) circulate to members entitled to have notice of any general meeting sent to them, any statement of not more
than one thousand words with respect to the matter referred to in any proposed resolution or any business to be
dealt with at the meeting.
(2) The number of members necessary for a requisition under clause (1) hereof shall be
(a) Such number of members as represent not less than one-twentieth of the total voting power of all the
members having at the date of the resolution a right to vote on the resolution or business to which the requisition
related; or
(b) not less than one hundred member having the rights aforesaid and holding shares in the Company on which
there has been paid up an aggregate sum of not less than rupees one lakh in all.
(3) Notice of any such resolution shall be given and any such statement shall be circulated to members of the
Company entitled to have notice of the meeting sent to them by serving a copy of the resolution or statement on
each member in any manner permitted by the Act for service of notice of the meeting and notice of any such
resolution shall be given to any other member of the Company be giving notice of the general effect of the
resolution in any manner permitted by the Act, for giving him notice of meeting of the Company. The copy of the
resolutions shall be served or notice of the effect of the resolution shall be given, as the case may be , in the same
manner and so far as practicable, at the same time as notice of the meeting and where it is not practicable for it to
be served or given at that time, it shall be served or given as soon as practicable thereafter.
(4) The Company shall not be bound under this Article to give notice of any resolution or to circulate any
statement unless:
(a) a copy of requisition signed by the requisitionists (or two or more copies which between them contain the
signature of all the requisitionists) is deposited at the registered office of the Company.
(i) in the case of requisition, requiring notice resolution, not less than six weeks before the meeting;
(ii) in the case of any holder requisition, not less than two weeks before the meeting; and
(b) there is deposited or tendered with the requisition sum reasonably sufficient to meet the Company expenses in
giving effect thereto.
PROVIDED THAT if after a copy of the requisition requiring notice of a resolution has been deposited at the
registered office of the Company and an Annual General Meeting is called for a date of six weeks or less after
such copy has been deposited, the copy although not deposited within the time required by this clause, shall be
deemed to have been properly deposited for the purposes also thereof.
(5) The Company shall also not be bound under this Article to circulate any statement if, on the application either
of the Company or of any other person who claims to be aggrieved is satisfied that the rights conferred by this
Article are being abused to secure needless publicity for defamatory matter.
(6) Notwithstanding anything in these Articles, the business which maybe dealt with at an Annual General
Meeting shall include any resolution of which notice is given in accordance with this Article and for the purposes
of this clause, notice shall be deemed to have been so given, notwithstanding the accidental commission, in giving
it, to one or more members.”
Extra-ordinary General Meeting by Board and by requisition
Article 85 (a) provides that “The Directors may, whenever they think fit, convene an Extra-Ordinary General
Meeting and they shall on requisition of the members as hereinafter provided, forthwith proceed to convene Extra-
ordinary General Meeting of the Company.”
405
When a Director or Any Two Members May Call an Extra-Ordinary General Meeting
Article 85 (b) provides that “If at any time there are not within India sufficient Directors capable of acting to form
a quorum or if the number of Directors be reduced in number to less than the minimum number of Directors
prescribed by these Articles and continuing Directors fail or neglect to increase the number of Directors to that
number or to convene a general meeting, any Director or any two or more members of the Company holding not
less than one-tenth of the total paid up share capital of the Company may call an Extra-Ordinary General Meeting
in the same manner as nearly as possible as that in which meeting may be called by the Directors.”
Quorum
Article 92 provides that “Five members entitled to vote and present in person shall be quorum for General
Meeting and no business shall be transacted at the general meeting unless the quorum requisite be present at the
commencement of the meeting. A body corporate being a member shall be deemed to be personally present if it is
represented in accordance with Section 187 of the Act. The President of India or the Governor of a State being a
member of the Company shall be deemed to be personally present if he is presented in accordance with Section
187A of the Act.”
If quorum not present when meeting to be dissolved and when to be adjourned
Article 93 provides that “If within half an hour from the time appointed for holding a meeting of the Company a
quorum is not present, the meeting if called by or upon the requisition of members shall stand adjourned to the
same day in the next week or if that day is a public holiday until the next succeeding day which is not a public
holiday at the time and place or to such other day and at such other time and place as the Board may determine. If
at the adjourned meeting also a quorum is not present with half an hour from the time appointed for holding the
meeting, the members present shall be quorum and may transact the business for which the meeting was called.”
Resolutions passed at adjourned meeting
Article 94 provides that “Where a resolution is passed at an adjourned meeting of the Company, the resolution for
all purposes, be treated as having been passed on the date on which it was in fact passed and shall not be deemed
to have been passed on any earlier date.”
Chairman of General Meeting
Article 95 provides that “At every General Meeting the Chair shall be taken by the Chairman of the Board of
Directors. If at any meeting, the Chairman of the Board of Directors be not present within ten minutes after the
time appointed for holding the meeting or though present, be unwilling to act as Chairman, the Vice-Chairman of
the Board of Directors would act as Chairman of the meeting and if Vice-Chairman of the Board of Directors be
not present or though present, be unwilling to act as and in default of their doing so or if no Directors shall be
present and willing to take the Chair, then the members present shall choose one of themselves, being a member
entitled to vote to be Chairman.
(a) Act for resolution sufficiently done or passed in General Meeting by ordinary resolution unless otherwise
require. Any Act or resolution which, under the provisions of this Article or of the Act, is permitted or enquired to
be done or passed by the Company in General Meeting shall be sufficiently so done or passed if effected by an
ordinary resolution unless either the Act or the Articles specifically require such act to be done or resolution
passed by a Special resolution.”
Chairman's casting vote
Article 102 provides that “In the case of equality of votes the Chairman shall both on a show of hands and a poll
(if any) have a casting vote in addition to the vote or votes to which he may be entitled as a member.”
Votes of Members
406
Member paying money in advance no to be entitled to vote in respect thereof
Article 106 provides that “A member paying the whole or a part of the amount remaining unpaid on any share
held by him although on part of that amount has been called up, shall not entitled to any voting rights in respect of
the moneys so paid by him until the same would but for such payment become presently payable.”
Article 106A provides that “The Company may pass a resolution by postal ballot in the manner prescribed by
Section 192A of the Act and such other applicable provisions of the Act. Notwithstanding anything contained in
the provisions of the Act, the Company, being a listed Company, may, and in the case of resolutions relating to
such business as the Central Government may be notification declare to be conducted only by postal ballot, shall
get any resolution passed by means of a postal ballot instead of transacting the business in a general meeting of the
Company.”
Restriction on exercise of voting rights of members who have not paid calls
Article 107 provides that “No member shall exercise any voting rights in respect of any shares registered in his
name on which any calls or other sums presently payable by him have not been paid or in regard to which the
Company has exercised any right of lien.”
Number of votes to which member entitled
Article 108 provides that “Subject to the provisions of Article 106 every member of the Company, holding any
equity share capital and otherwise entitled to vote shall, on a show of hands when present in person (or being a
body corporate present by a representative duly authorised) have one vote on a poll, when present (including a
body corporate by a duly authorised representative) or by an agent duly authorised under a Power of Attorney or
by proxy, his voting right shall be in proportion to his share of the paid-up equity share capital of the Company.
Provided however, if any preference share-holder be present at any meeting of the Company, save as provided in
clause (b) of such-section(2) of Section 87, he shall have a right to vote only on resolutions before the meeting
which directly affect the rights attached to his preference shares. A member is not prohibited from exercising his
voting rights on the ground that he has not held his shares or interest in the Company for any specified period
proceeding the date on which the vote is taken.”
Voting in person or by proxy
Article 113 provides that “Subject to the provisions of these Articles, vote may be given either personally or by
proxy. A body corporate being a member may vote either by a proxy or by a representative duly authorised in
accordance with Section 187 of the Act.”
Proxies
Article 115 provides that “Any member of the Company entitled to attend and vote at a meeting of the Company
shall be entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of
himself PROVIDED ALWAYS that a proxy so appointed shall not have any right whatever to speak at the
meeting. Every notice convening a meeting of the Company shall state that a member entitled to attend and vote is
entitled to appoint one or more proxies.”
Chairman of any meeting to be the judge of validity of any vote
Article 122 provides that “The Chairman of any meeting shall be the sole judge of the validity of every vote
tendered at such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity of
every vote tendered at such poll. The decision of the Chairman shall be final and conclusive.”
Directors
407
Number of Directors
Article 124 provides that “Until otherwise determined by a General Meeting of the Company and subject to the
provisions of Section 252 of the Act, the number of Directors shall not be less than three and not more than
twelve.”
Debenture Directors
Article 126 provides that “Any Trust Deed for securing debentures or debenture-stocks, may, if so arranged,
provide for the appointment, from time to time by the Trustees thereof or by the holders of debentures or
debenture-stocks, of some person to be a Director of the Company and may empower such Trustees or holder or
debentures or debenture-stocks, from time to time, to remove and re-appoint any Director so appointed. The
Director appointed under Article is herein referred to as "Debenture Director" and the term "Debenture Director"
means the Director for the time being in office under this Article. The Debenture Director shall be liable to retire
by rotation or be removed by the Company. The Trust Deed may contain such ancillary provisions as may be
arranged between the Company and the Trustees and all such provisions shall have effect notwithstanding any of
the other provisions herein contained.”
Corporation Directors
Article 127 provides that “Any bond or any other writing giving security issued or executed by the company in
favour of any Credit Corporation or any agreement executed by the company in favour of a Credit Corporation
may provide for the appointment of a Director (in these presents referred to as "The Corporation Directors") for
and on behalf of the holder of such bonds of such Credit Corporation for such period as therein provided for not
exceeding the period for which any amount may be outstanding under such bond or writing or agreement and for
removal from the office of such Director and on a casual vacancy being caused whet her by resignation, death
removal or otherwise, for the appointment of another Director in the vacant place. The Corporation Director shall
not be liable to retire by rotation and subject to the provisions of the Act be removed from his office by the
company.”
Nominee Director
Article 128 provides that “(a) Notwithstanding anything to the contrary contained in these Articles, so long as any
moneys remain owning by the Company to Bank, Industrial Finance Corporation of India(IFCI),Industrial Credit
and Investment Corporation of India Limited(ICICI) The Industrial Development Bank of India (IDBI) or to any
other Financing Company or so long as IFCI, ICICI, IDBI or any other Financing Corporation or any other
Financing Company or Body (each of which IFCI, ICICI, IDBI or any other Finance Corporation or Credit
Corporation or any other Financing Company or Body is hereinafter in this Article referred to as "the
Corporation") continued to hold debentures in the Company as a result of underwriting or by direct subscription or
private placement or so long as the Corporation holds shares in the Company as result of underwriting or direct
subscription or so long as any liability of the Company arising out of any guarantee furnished by the Corporation
on behalf of the Company remains outstanding the Corporation shall have a right to appoint from time to time any
person or persons as a Director or Directors, Whole-time or non-Whole-time (which Director or Directors is/are
hereinafter referred to as "Nominee Director/s") on the Board of the Company and to the Company and to remove
from such office any person or persons so appointed and to appoint any person or persons in his or their place/s.
(b) The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At
the option of the Corporation, such Nominee Director/s shall not be required to hold any share qualification in the
Company. Also at the option of the Corporation, such Nominee Director/s shall not be liable to retirement by
rotation, Subject as aforesaid the Nominee Director/s shall be entitled to the same rights and privileges and be
subject to the same obligation as any other Director of the Company.
(c) The Nominee Director/s so appointed shall hold the said office only so long as moneys remained owing by the
Company to the Corporation or so long as the Corporation or private placement or so long as the Corporation
holds shares in the Company as a result of underwriting or direct subscription or liability of the company arising
408
out of any guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall
ipso facto vacate such office immediately on the moneys owing by the Company to the Corporation is paid off or
on the Corporation shall ceasing to hold debentures/shares in the Company or on the satisfaction of the liability of
the Company arising out of any guarantee furnished by the Corporation.
(d) The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all
General Meeting, Board meetings or the Committee of which the Nominee Director/s is/are member/s as also the
minutes of such meetings. The Corporation shall also be entitled to receive all such notice and minutes.
(e) The Company shall pay to the Nominee Director/s sitting fees and expenses which the other Directors of the
Company are entitled but if any others fees, commission, moneys or remuneration in any other form is payable to
the Directors of the Company. The fees, commission, moneys, remuneration in relation to such Nominee
Director/s shall accrue to the Corporation and same shall accordingly be paid by the company directly to the
Corporation Any expenses that may be incurred by the Corporation or such Nominee Director/s in connection with
their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or as the
case may be to such Nominee Director/s. Provided that if any such Nominee Director/s is an officer of the
Corporation , the sitting fees in relation to such Nominee Director/s shall also accrue to the Corporation and the
same shall accordingly be paid by the Company directly to the Corporation.
(f) Provided also that in the event of the Nominee Director/s being appointed as whole time Director/s such
Nominee Director/s shall exercise such power and duties as may be approved by the Lenders and have such rights
as are usually exercised or available to a whole time Director, in the management of the affairs of the Borrower
and such Nominee Director/s shall be entitled to receive any remuneration, fees, commission and moneys as may
be approved by the Lenders.”
Limit on number of non-retiring Directors
Article 129 provides that “The provisions of Articles 124, 125 and 126 are subject to the provisions of Section 256
of the Act and number of such Directors appointed under Article 132 shall not exceed in the aggregate one-third of
the total number of Directors for the time being in office.”
Qualification of shares
Article 133 provides that “A Director need not hold any qualification shares.”
Director's sitting fees
Article 134 provides that “The fees payable to a Director for attending Board Meeting shall be such sum as may
be prescribed under Section 310 of the Act or may be prescribed by the Central Government from time to time for
each of the meetings of the Board or a Committee thereof and adjournments thereto attended by him. The
Directors, subject to the sanction of the Central Government (if any required), may be paid such higher fees as the
company in General Meeting shall from time to time determine.”
Extra remuneration to Directors for special work
Article 135 provides that “Subject to the provisions of Section 198, 309,310,311 and 314 of the Act, if any
Director, being willing shall be called, upon to perform extra services (which expression shall include work done
by a Director as a member of any committee formed by the Directors or in relation to signing Share Certificates)
or to make special exertions in going or residing out of his usual place of residence or otherwise for any of the
purposes of the Company, the Company shall remunerate the Director so doing either by a fixed sum or otherwise
as may be determined by the Directors and such remuneration may be either in addition to or in substitution for his
share in the remuneration above provided. The Directors (other than the Managing Director or any other Whole-
time paid Director) shall also be entitled to further remuneration by way of commission at the rate of 1 per cent of
the net profits of the company calculated in accordance with the provisions of the Companies Act, 1956 and such
remuneration shall be divided among the Directors (other than the Managing Director or Whole-time paid
409
Directors) in such proportion and manner as may be agreed upon between them and the Board of Directors and in
the absence of agreement, equally.”
Directors and Managing Director may contract with company
Article 138 provides that “Subject to the provisions of the Act, the Directors (including a Managing Director and
Whole-time Director) shall not be disqualified by reason of his or their office as such from holding office under
the company or form contracting with the company either as vendor, purchaser, lender, agent, broker, lessor or
lessee or otherwise, nor shall any such contract or any contract or arrangement entered into by or on behalf of the
company with any Director or with any company or partnership, of or in which any Director shall be member or
otherwise interested be avoided, nor shall any Director so contracting or being such member or so interested be
liable to account to the company for any profit realised by such contract or arrangement by reason only of such
Director holding that office or of the fiduciary relation thereby established, but it is declared that the nature of his
interest shall be disclosed as provided by Section 299 of the Act and in this respect all the provisions of Sections
300 and 301 of the Act shall be duly observed and complied with.”
Rotation and Appointment of Directors
Rotation of Directors
Article 139 provides that “Not less than two-thirds of the total number of Director shall (a) be persons whose
period of the office is liable to termination by retirement of Directors by rotation and (b) save otherwise expressly
provided in the Articles be appointed by the company in General Meeting.”
Retirement of Directors
Article 140 provides that “Subject to the provisions of Articles 129 the non-retiring Directors should be appointed
by the Board for such period or periods as it may in its discretion deem appropriate.”
Retirement of Directors
Article 141 provides that “Subject to the provisions of Section 256 of the Act and Articles 129 at every Annual
General Meeting of the Company, one-third of such of the Directors for the time being as are liable to retire by
rotation or if their number is not three or a multiple of three the number nearest to one-third shall retire from
office. The Debenture Directors, Nominee Directors, Corporation Directors, subject to Articles 126,127,128 and
146 Managing Directors, if any, shall not be subject to retirement under this Article and shall not be taken into
account in determining the number of Directors to retire by rotation. In these Articles, a "Retiring Director" means
a Director retiring by rotation.”
Eligibility for re-election
Article 143 provides that “A retiring Director shall be eligible for re-election and shall act as a Director throughout
and till the conclusion of the meeting at which he retires.”
Managing Director
Power to appoint Managing Director
Article 146 provides that “Subject to the provisions of Sections 267, 268, 269, 316 and 317 of the Act, the Board
may, from time to time, appoint one or more Directors to be Managing Director or Managing Directors or Whole-
time Directors of the Company, either for a fixed term of five years as to the period for which he or they is or are
to hold such office and may, from time to time (subject to the provisions of any contract between him or them and
the company) remove or dismiss him or them from office and appoint another or others in his or their place or
places.”
410
Proceedings of the Board of Directors
Article 150 provides that “The Directors may meet together as a Board for the dispatch of business from time to
time unless the Central Government by virtue of the provision of Section 285 of the Act otherwise directs, shall so
meet at least once in every three months and at least four such meetings shall be held in every year. The Directors
may adjourn and otherwise regulate their meetings as they think fit. The provision of this Article shall not be
deemed to have been contravened merely by reason of the fact that the meeting of the Board which had been
called in compliance with the terms of this Article could not be held for want of a quorum.”
Quorum
Article 151 provides that “(a) Subject to Section 287 of the Act, the quorum for a meeting of the Board of
Directors shall be one-third of its total strength (excluding Directors, if any, whose place may be vacant at the time
and any fraction contained in that one-third being rounded off as one) or two Directors whichever is higher.
PROVIDED THAT where at any time the number of interested Directors at any meeting exceeds or is equal to
two-third of the total strength, the number of the remaining Directors (that is to say, the number of remaining who
are not interested) present at the meeting being not less than two shall be the quorum during such time.
(b) For the purpose of clause (a):
(i) “Total Strength” means total strength of the Board of Directors of the Company determined in pursuance of the
Act, after deducting therefrom number of the Directors, if any, whose place may be vacant at the time; and
(ii) “Interested Directors” means any Director whose presence cannot, by reason of any provisions in the Act,
count for the purpose of forming a quorum at a meeting of the Board, at the time of the discussion or vote or any
matter.
Chairman of Meeting
Article 153 provides that “(a) The Directors from time to time elect one of their number to be the Chairman and
one to be the Vice-Chairman, if required of the Board of Directors and determine the period for which they have to
hold such office, but if no such Chairman or Vice-Chairman is elected, the Directors present shall choose one of
their number to be the Chairman of such meeting.
(b) The Chairman of the Board of Directors shall be the Chairman of the Meeting of Directors and shall also
preside over all General Meetings of the company. Provided that if the Chairman of the Board of Directors is not
present, the Vice-Chairman of the Board of Directors shall preside the meeting and if the Vice-Chairman of the
Board of Directors is also not present, the Directors present shall choose one of their number to be the Chairman of
such meeting.”
Questions at Board Meeting how decided
Article 154 provides that “Subject to the provisions of Sections 316, 375(5) and 386 of the Act, questions arising
at any meeting of the Board shall be decided by a majority of votes and in case of any equality of votes, the
Chairman shall have a second or casting vote.”
Powers of Board Meeting
Article 155 provides that “A meeting of the Board of the Directors for the time being at which a quorum is present
shall be competent to exercise all or any of the authorities, powers and discretion which by or under the Act or
these Articles or the regulations for the time being of the Company are vested in or exercisable by the Board of
Directors generally.
Directors may appoint committee
411
Article 156 provides that “The Board of Directors may subject to the provisions of Section 292 and other relevant
provisions of the Act or these Articles, delegate any of the powers other than the powers to make calls and to issue
debentures to such committee or committees and may from time to time revoke and discharge any such committee
of the Board either wholly or in part and either as to the persons or purposes, but every committee of the Board so
formed shall in exercise of the powers so delegated conform to any regulation that may from time to time be
imposed on it by the Board of Directors. All acts done by any such committee of the Board in conformity with
such regulations and in fulfillment of the purpose of their appointments, but not otherwise, shall have the like force
and effect, as if done by the Board.”
Powers of the Board
General Powers of Management vested in Directors
Article 160 provides that “The business of the Company shall be managed by the Directors who may exercise all
such powers of the Company and do all such acts and things as are not by the Act or any other Act or by the
Memorandum or by the Articles of Company required to be exercised by the Company in General Meeting,
subject nevertheless to any regulation of these Articles or the provisions of the Act or any other Act and to such
regulation being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the
Company in General Meeting but no regulations made by the Company in General Meeting shall invalidate any
prior act of the Directors which would have been valid if that regulation had not been made, provided that the
Board of Directors shall not except with the consent of the Company in General Meeting :
(a) Sell, lease or otherwise dispose off the whole or substantially the whole of the undertaking of the Company or
where the Company owns more than one undertaking, of the whole or substantially the whole of any such
undertaking;
(b) Remit or give time for the payment of any debt due by a Director
(c) Invest, otherwise than in trust securities, the amount of compensation received by the Company in respect of
the compulsory acquisition, of any such undertaking as is referred to in clause (a) or of any premises or properties
used for any such undertaking and without which it cannot be carried on or can be carried on only with difficulty
or only after a considerable time;
(d) Borrow moneys, where moneys to be borrowed, together with the money already borrowed by the Company
(apart from temporary loans obtained from the Company's bankers in the ordinary course of business) will exceed
the aggregate of the paid up capital of the Company and its free reserves, that is to say, reserves not set apart for
any specific purpose; or
(e) Contribution to charitable and other funds not directly relating to the business of the Company or the welfare of
its employees any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees or five
per cent of its average net profits as determined in accordance with the provisions of Sections 349 and 350 of the
Act during the three financial years immediately preceding, whichever is greater, provided that the Company in
General Meeting or the Board of Directors shall not contribute any amounts to any political party or for any
political purpose to any individual or body;
(i) Provided that in respect of the matter referred to in clause (d) and (e), such consent shall be obtained by a
resolution of the Company which shall specify the total amount upto which moneys may be borrowed by the
Board under clause (d) or as the case may be, total amount which may be contributed to charitable or other funds
in any financial year under clause (e).
(ii) Provided further that the expression "temporary loans" in clause (d) above shall mean loans repayable on
demand or within six months from the date of the loan such as short term cash credit arrangements, the
discounting of bills and the issue of other short term loans of a seasonal character, but does not include loans
raised for the purpose of financing expenditure of a capital nature.”
412
Certain powers to be exercised by the Board only at meeting.
Article 161 provides that “(1) Without derogating from the powers vested in the Board of Directors under these
Articles, the Board shall exercise the following powers on behalf of the Company and they shall do so only by
means of resolutions passed at the meeting of the Board :
(a) The power to make calls on shareholders in respect of moneys unpaid on their shares;
(b) The power to issue debentures ;
(c) The power to borrow moneys otherwise than on debentures ;
(d) The power to invest the funds of the Company; and
(e) The power to make loans.
Provided that the Board may, by resolution passed at a meeting, delegate to any committee of Directors, the
Managing Director or any other principal officer of the Company, the powers specified in sub-clauses (c), (d) and
(e) to the extent specified below.
(2) Every resolution delegating the power referred to in sub-clause (1)(c) shall specify the total amount
outstanding at any one time, upto which money may be borrowed by the delegate.
(3) Every resolution delegating the power referred to in sub-clause (1)(d) shall specify the total amount upto which
the funds of the Company may be invested and the nature of the investments which may be made by the delegate.
(4) Every resolution delegating the power referred to in sub-clause (1)(e) shall specify the total amount upto which
loans may be made by the delegate, the purpose for which the loans may be made and the maximum amount of
loans which may be for each such purpose in individual cases.”
Certain powers of the Board
Article 162 provides that “Without prejudice to the general powers conferred by the last preceding Article and so
as not in any way to limit or restrict those powers and without prejudice to the other powers conferred by these
Articles but subject to the restrictions contained in the last preceding Articles, it is hereby declared that the
Directors shall have the following powers, that is to say, power :
(1) To pay the costs, charges and expenses preliminary and incidental to the formation, promotion, establishment
and registration of the Company.
(2) To pay and charge to the Capital Account of the Company any commission or interest, lawfully payable
thereout under the provisions of Sections 76 and 208 of the Act.
(3) Subject to Sections 292 and 297 and other applicable provisions of the Act, to purchase or otherwise acquire
for the Company any property, rights or privileges which the Company is authorised to acquire at or for such price
or consideration and generally on such terms and conditions as they may think fit in any such purchase or other
acquisition, accept such title as the Director may believe or may be advised to be reasonably satisfactory.
(4) At their discretion and subject to the provisions of the Act, to pay for any property, rights or privileges by or
services rendered to the Company, either wholly or partially in cash or in shares, bonds, debentures, mortgages or
other securities of the Company and any such shares may be issued either as fully paid up or with such amount
credited as paid up thereon as may be agreed upon and any such bonds, debentures, mortgages or other securities
as may be either specifically charged upon all or any part of the property of the Company and its uncalled capital
or not so charged.
413
(5) To secure the fulfillment of any contracts or engagements entered into by the Company by mortgage or charge
of all or any of the property of the Company and its uncalled capital for the time being or in such manner as they
may think fit.
(6) To accept from any member, so far as may be permissible by law, a surrender of his shares or any part thereof,
on such terms and conditions as shall be agreed.
(7) To appoint any person to accept and hold in trust for the Company property belonging to the Company or in
which it is interested or for any other purposes and to execute and to do all such deeds and things as may be
required in relation to any such trust and to provide for the remuneration of such trustee or trustees.
(8) To institute, conduct, defend, compound or abandon any legal proceedings by or against the Company or its
officer or otherwise concerning the affairs of the Company and also to compound and allow time for payment on
satisfaction of any debts due and of any claim or demands by or against the Company and to refer any difference
to arbitration and observe the terms of any awards made therein either according to Indian Law or according to
Foreign Law and either in India or abroad and observe and perform or challenge any award made therein.
(9) To act on behalf of the Company in all matters relating to bankruptcy, insolvency, winding up and liquidation
of Companies.
(10) To make and give receipts, release and other discharge for moneys payable to the Company and for the claims
and demands of the Company.
(11) Subject to the provisions of Sections 291(1), 295, 370 and 372 and other applicable provisions of the Act and
these Articles, to invest and deal with any moneys of the Company not immediately required for the purpose
thereof, upon such security (not being the shares of this Company) or without security and in such manner as they
may think fit and from time to vary or realise such investment. Save as provided in Section 49 of the Act, all
investments shall be made and held in the Company's own name.
(12) To execute in the name and on behalf of the Company in favour of any Director or other person who may
incur or be about to incur any personal liability whether as principal or surety, for the benefit of the Company,
such mortgage of the Company's property (present and future) as they think fit and any such mortgage may contain
a power of sale and other powers, provisions, covenants and agreements as shall be agreed upon.
(13) To open bank accounts and to determine from time to time who shall be entitled to sign, on the Company's
behalf, bills, notes, receipt, acceptance, endorsements, cheques, dividend warrants, release, contracts and
documents and to give the necessary authority for such purposes.
(14) To distribute by way of bonus amongst the staff of the Company a share or shares in the profits of the
Company and do give to any Director, officer or other person employed by the Company a commission on the
profits of any particular business and or transaction and to charge such bonus or commission as part of working
expenses of the Company.
(15) To provide for the welfare of Directors or Ex-Directors or employees or ex-employees of the Company and
the wives, widows and families of the dependents or connections of such persons by building or contributing to the
building of houses, dwellings or chawls or by grants of money, pension, gratuities, allowances, bonus or other
payments or by creating and from time to time, subscribing or contributing to provident and other associations,
institutions and by providing or subscribing or contributing towards places of interests and recreation, hospitals,
dispensaries, medical and other attendance and other assistance as the Board shall think fit and subject to the
provisions of Section 293(1)(e) of the Act, to subscribe or contribute or otherwise to assist or to guarantee money
to charitable, benevolent, religious, scientific, national or other institutions or objects which shall have any moral
or other claim to support or aid by the Company either by reason of locality of operation or the public and general
utility or otherwise.
414
(16) Before recommending any dividend, to set aside, out of the profits of the Company, such sums as they may
think proper for depreciation or the depreciation fund or to an insurance fund or as a reserve fund or sinking fund
or any special or other fund or funds or account or accounts to meet contingencies or to repay redeemable
preference shares, debentures or debenture-stock or for special dividends or for equalising dividends for repairing,
improving, extending and maintaining any part of the property of the Company and such other purposes (including
the purposes referred to in the preceding clause) as the Board may, in their absolute discretion think conducive to
the interest of the company and subject to Section 292 of the Act, to invest the several sums so set aside or so
much thereof as required to be invested, upon such investments (other than share of this Company) as they may
think fit and from time to time to deal with and vary such investments and dispose off and apply and expend all or
any part thereof for the benefit of the Company, in such manner and for such purposes as the Board in their
absolute discretion think conducive to the interest of the Company notwithstanding that the matters to which the
Board apply or upon which they expend the same or any part thereof or upon which the capital moneys of the
Company might rightly be applied or expended and to divide the General Reserve or Reserve Fund into such
special funds as the Board may think fit with full power to transfer the whole or any portion of a Reserve Fund to
another Reserve Fund and/or division of a Reserve Fund and with full power to employ the assets constituting all
or any of the above funds including the depreciation fund in the business of the Company or in purchase or
repayment of redeemable preference shares, debentures or debenture-stock and without being bound to keep the
same separate from the other assets and without being bound to pay interest on the same with power however to
the Board at their discretion to pay or allow to the credit of such funds interest at such rate as the Board think
proper.
(17) To appoint and at their discretion remove or suspend such general managers, managers, secretaries, assistants,
supervisors, scientists, technicians, engineers, consultants, legal, medical or economic advisers, research workers,
labourers, clerks, agents and servants for permanent, temporary or special services as they may from time to time
think fit and to determine their powers and duties and to fix their salaries or emoluments or remuneration and
acquire security in such instances and to such amounts as they may think fit and also from time to time provide for
the management and transactions of the affairs of the company in any specified locality in India or elsewhere in
such manner as they think fit.
(18) From time to time and at any time to establish any local Board for managing of the affairs of the Company in
any specified locality in India or elsewhere and to appoint any person to be members of such local Board or
managers or agencies and to fix their remuneration.
(19) Subject to Section 292 of the Act, from time to time and at any time, to delegate to any persons so appointed
any of the powers, authorities and discretion for the time being vested in the Board, other than their powers to
make calls or to make loans or borrow moneys and to authorise the members for the time being of such local
Board or any of them to fill up any vacancies therein and to act notwithstanding vacancies and such appointment
or delegation may be made on such terms subject to such conditions as the Board may think fit and the Board may
at any time remove any person so appointed and may annul or vary any such delegation.
(20) At any time and from time to time by power of Attorney under the Seal of the Company, to appoint any
person or persons to be the Attorney or Attorneys of the Company, for such purposes and with such powers,
authorities and discretion (not exceeding those vested in or exercisable by the Board under these presents and
excluding the power to make calls and excluding also, except in their limits authorised by the Board, the power to
make loans and borrow moneys) and for such period and subject to such conditions as the Board may from time to
time think fit and any such appointments may (if the Board thinks fit) be made in favour of the members of any
local Board established as aforesaid or in favour of any Company or the shareholders, Directors, Nominees or
Managers of any Company or firm or otherwise in favour of any fluctuating body or persons whether nominated
directly or indirectly by the Board and any such power of Attorney may contain such powers for the protection of
convenience of persons dealing with such Attorneys as the Board may think fit and may contain powers enabling
any such delegating Attorneys as aforesaid to sub-delegate all or any of the powers, authorities and discretion for
the time being vested in them.
(21) Subject to Sections 294, 297, 300 and other applicable provisions of the Act, for or in relation to any of the
matters aforesaid or otherwise for the purposes of the Company, to enter into all such negotiations and contracts
415
and rescind and vary all such contracts and execute and do all such acts, deeds and things in the name and on
behalf of the company as they may consider expedient.
(22) From time to time make, vary and repeal bye-laws for the regulations of the business of the Company, its
officers and servants.
(23) To purchase or otherwise acquire any lands, buildings, machinery, premises, hereditaments, property, effects,
assets, rights, credits, royalties, business and goodwill of any Joint Stock Company carrying on the business which
the Company is authorised to carry on in any part of India.
(24) To purchase, take on lease for any term of years or otherwise acquire any factories, or any land or lands, with
or without buildings and out houses thereon, situate in any part of India, at such price or rent and under and subject
to such terms and conditions as the Directors may think fit and in any such purchase, lease or other acquisition to
accept such title as the Directors may believe or may be advised to be reasonably satisfactory.
(25) To insure and keep insured against loss or damage by fire or otherwise for such period and to such extent as it
may think proper all or any part of the buildings, machinery, goods, stores, produce and other movable property of
the Company, either separately or co-jointly, also to insure all or any portion of the goods, produce, machinery and
other articles imported or exported by the Company and to sell, assign, surrender or discontinue any policies of
assurance effected in pursuance of this power.
(26) To purchase or otherwise acquire or obtain license for the use of and to sell, exchange or grant license for the
use of any trademark, patent, invention or technical know-how.
(27) To sell from time to time any articles, materials, machinery, plants, stores and other articles and things
belonging to the Company as the Board may think proper and to manufacture, prepare and sell waste and bye-
products.
(28) From time to time to extend any business any undertaking of the Company by adding, altering or enlarging all
or any of the buildings, factories, workshops, premises, plant and machinery, for the time being the property of or
in the possession of the Company or by erecting new or additional building and to expend such sum of money for
the purpose aforesaid or any of them as may be thought necessary or expedient.
(29) To undertake on behalf of the Company any payment of all rents and the performance of the convenants,
conditions and agreements contained in or reserved by any lease that may be granted or assigned to or otherwise
acquired by the Company and to purchase the reversion or reversions and otherwise to acquire the free hold simple
of all or any of the lands of the Company for the time being held under lease or for an estate less than free hold
estate.
(30) To improve, manage, develop, exchange, lease, sell, resell and repurchase, dispose off, deal or otherwise turn
to account, and property (movable or immovable) or any rights or privileges belonging to or at the disposal of the
Company or in which the Company is interested.
(31) To let, sell or otherwise dispose off, subject to the provisions of Section 293 of the Act and of the other
Articles, any property of the Company, either absolutely or conditionally and in such manner and upon such terms
and conditions in all respects as it thinks fit and to accept payment of satisfaction for the same in cash or otherwise
as it thinks fit.
(32) Generally, subject to the provisions of the Act and these Articles, to delegate the powers, authorise and
discretion vested in the Directors to any person, firm, Company or fluctuating body of persons as aforesaid.”
The Seal
The Seal its custody and use
416
Article 167 provides that “(a)The Board of Directors shall provide a Common Seal for the purpose of the
Company and shall have power from time to time to destroy the same and substitute a new seal in lieu thereof and
the Board shall provide for the safe custody of the Seal for the time being, under such regulations as the Board
may prescribe.
(b) The Seal shall not be affixed to any instrument except by the authority of the Board of Directors or a
Committee of the Board previously given and in the presence of at least two Directors of the Company or at least
one Director and Secretary or any other person duly authorised by the Board, both of whom shall sign every
instrument to which the seal is affixed. Provided further that the certificates of shares or debentures shall be sealed
in the manner and in conformity with the provisions of the Companies (Issue of Share Certificates) Rules, 1960
and their statutory modifications for the time being in force.
Dividend
Division of profits
Article 168 provides that “(a) Subject to the rights of persons, if any, entitled to shares with special rights as to
dividends, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares
in respect whereof the dividend is paid but if and so long as nothing is paid upon any shares in the Company,
dividends may be declared and paid according to the amounts of the shares.
(b) No amount paid or credited as paid on a share in advance of calls shall be treated for the purpose of this
regulation as paid on the shares.”
The Company in General Meeting may declare dividends
Article 169 provides that “The Company in General Meeting may declare dividends, to be paid to members
according to their respective rights and interest in the profits and may fix the time for payment and the Company
shall comply with the provisions of Section 207 of the Act, but no dividends shall exceed the amount
recommended by the Board of Directors but the Company may declare a smaller dividend in General Meeting.”
Dividend out of profits only
Article 170 provides that “No dividend shall be payable except out of profits of the Company arrived at in the
manner provided for in Section 205 of the Act.”
Interim Dividend
Article 171 provides that “The Board of Directors may from time to time pay to the members such interim
dividends as in their judgment the position of the Company justifies.”
Debts may be deducted
Article 172(a) provides that “The Directors may retain any dividends on which the Company has a lien and may
apply the same in or towards the satisfaction of the debts, liabilities or engagements in respect of which the lien
exists.”
Company may retain dividends
Article 172(b) provides that “The Board of Directors may retain the dividend payable upon shares in respect of
which any person is under the transmission Article entitled to become a member or which any person under that
Article is entitled to transfer until such person shall become a member or shall duly transfer the same.“
No member to receive dividend whilst indebted to the Company and the Company‟s right of reimbursement
thereof
417
Article 175 provides that “No member shall be entitled to receive payment of any interest or dividend or bonus in
respect of his share or shares, whilst any money may be due or owing from him to the Company in respect of such
share or shares (or otherwise however either alone or jointly with any other person or persons) and the Board of
Directors may deduct from the interest or dividend to any member, all such sums of money so due from him to the
Company.”
Effect of Transfer of shares
Article 176 provides that “A transfer of shares shall not pass the right to any dividend declared therein before the
registration of the transfer.”
Dividend to joint holders
Article 177 provides that “Any one of several persons who are registered as joint holders of any share may give
effectual receipts for all dividends or bonus and payments on account of dividends in respect of each shares.”
Capitalisation
Article 182 provides that “(1) The Company in General Meeting may, upon the recommendation of the Board,
resolve:
(a) that it is desirable to capitalize any part of the amount for the time being standing to the credit of the
Company‟s reserve accounts or to the credit of the profit and loss account or otherwise available for distribution;
and
(b) that such sum be accordingly set free for distribution in the manner specified in clause (2) amongst the
members who would have been entitled thereto, if distributed by way of dividend and in the same proportions.
(2) The sum aforesaid shall not be paid in cash but shall be applied, subject to the provision contained in clause (3)
either in or towards:
(i) paying up any amount for the time being unpaid on any shares held by such members respectively.
(ii) paying up in full unissued shares of the Company to be allocated and distributed, credited as fully paid up to
and amongst members in the proportions aforesaid; or
(iii) partly in the way specified in such clause (i) and partly in that specified in sub-clause (ii).
(3) A share premium account and a capital redemption reserve account may, for the purpose of this regulation,
only be applied in the paying up of unissued shares to be issued to members of the Company as fully paid bonus
shares.
(4) The Board shall give effect to the resolution passed by the Company in pursuance of this regulation.”
Fractional certificates
Article 183 provides that “ (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall
(a) make all appropriations and applications of the undivided profits resolved to be capitalized thereby and all
allotments and issues of fully paid shares and
(b) generally do all acts and things required to give effect thereto
(2) The Board shall have full power:
418
(a) to make such provision, by the issue of fractional cash certificate or by payment in cash or otherwise as it think
fit, in the case of shares becoming distributable in fractions, also
(b) to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the
Company providing for the allotment to them respectively credited as fully paid up, of any further shares to which
they may be entitled upon such capitalization or (as the case may require) for the payment by the Company on
their behalf, by the application thereof of either respective proportions of the profits resolved to be capitalized of
the amounts remaining unpaid on their existing shares.
(3) Any agreement made under such authority shall be effective and binding on all such members.
(4) That for the purpose of giving effect to any resolution, under the preceding paragraph of this Article, the
Directors may give such directions as may be necessary and settle any question of difficulties that may arise in
regard to any issue including distribution of new equity shares and fractional certificates as they think fit.”
Accounts
Article 184 provides that “ Books to be kept
(1) The Company shall keep at its registered office proper books of account as would give a true and fair view to
the state of affairs of the Company or its transaction with respect to:
(a) all sums of money received and expended by the Company and the matters in respect of which the receipt and
expenditure take place;
(b) all sales and purchases of goods by the Company;
(c) the assets and liabilities of the Company; and
(d) if so required by the Central Government, such particulars relating to utilization of material or labour or other
items of cost as may be prescribed by that Government.
Provided that all or any of the books of account aforesaid may be kept at such other place in India as the Board of
Directors may decide and when the Board of Directors so decides, the Company shall, within seven days of the
decision file with the Registrar a notice in writing giving the full address of that other place.
(2) Where the Company has branch office, whether in or outside India, the Company shall be deemed to have
complied with the provisions of clause (1) if proper books of account relating to the transactions effected at the
branch are kept at that office and proper summarised returns, made upto date at intervals of not more than three
months, are sent by the branch office to the Company at its registered office or the other place referred to in clause
(1). The books of account and other books and papers shall be open to inspection by any Director during business
hours.”
Accounts to be audited
Article 187 provides that “Once at least in every year the accounts of the Company shall be examined, balanced
and audited and the correctness of the Profit and Loss Account and Balance Sheet ascertained by one or more
Auditor or Auditors.”
Winding Up
Distribution of Assets
Article 195 provides that “If the Company shall be wound up and the assets available for distribution among the
members as such shall be insufficient to repay the whole of the paid up capital, such assets shall be distributed so
that as nearly as may be the losses shall be borne by the members in the proportion to the capital paid up or which
419
ought to have been paid up at the commencement of winding up on the shares held by them respectively and if in
the winding up, the assets available for distribution among the members shall be more than sufficient to repay the
whole of the capital paid at the commencement of the winding up, the excess shall be distributed amongst
members in proportion to the capital at the commencement of the winding up, paid up or which ought to have been
paid up on the shares held by them respectively. But this article is to be without prejudice to the rights of the
holders of shares issued upon special terms and conditions.”
Distribution in specie or kind
Article 196 provides that “(a) If the Company shall be wound up, whether voluntarily or otherwise, the liquidator
may, with the sanction of a special resolution, divide amongst the contributories in specie or kind, any part of the
assets of the Company and may with the like sanction vest any part of the assets of the Company in Trustees upon
such trusts for the benefit of the contributories or any of them as the Liquidator, with the like sanction, shall think
fit.
(b) If thought expedient any such division may subject to the provisions of the Act be otherwise than in accordance
with the legal rights of the contributories (except where unalterably fixed by the Memorandum of Association) and
in particular any class may be given preferential or special rights or may be excluded altogether or in part but in
case any division otherwise than in accordance with the legal rights of the contributories, shall be determined on
any contributory who would be prejudicial thereby shall have a right to dissent any ancillary rights as if such
determination were a special resolution passed pursuant to Section 494 of the Act.
(c) In case any shares to be divided as aforesaid involve a liability to calls or otherwise, any person entitled under
such division to any of the said shares may within ten days after the passing of the special resolution by notice in
writing direct the liquidator to sell his proportion and pay him the net proceeds and the liquidator shall, if
practicable, act accordingly.”
Directors and other‟s right to indemnity
Article 197 provides that “Subject to the provisions of Section 201 of the Act, every Director or officer or servant
of the Company or any person (whether an officer of the Company or not) employed by the Company as auditor,
shall be indemnified by the Company against and it shall be the duty of the Directors out of the funds of the
Company, to pay all costs, charges, losses and damages which any such person may incur or become liable to by
reason of any contract entered into or any act, deed, matter or thing done, concurred in or omitted to be done by
him in any way in or about the execution or discharge of his duties or supposed duties (except such, if any, as he
shall incur or sustain through or by his own wrongful act, neglect or default including expenses and in particular
and so as not to limit the generality of the foregoing provisions against all liabilities incurred by him as such
Director, Officer or Auditor or other Officer of the Company in defending any proceedings whether civil or
criminal in which judgement is given in his favour or in which he is acquitted or in connection with any
application under Section 633 of the Act in which relief is granted to him by the Court.”
Director, Officer not responsible for acts of others
Article 198 provides that “Subject to the provisions of Section 201 of the Act, no Director, Auditor or other
Officer of the Company shall be liable for the acts, receipts, neglects or defaults of any other Director or Officer or
for joining in any receipt or other act for conformity or for any loss or expenses happening to the Company
through the insufficiency or deficiency of title to any property acquired by order of the Directors for or on behalf
of the Company or for the insufficiency or deficiency of any security in or upon which any of the money of the
Company shall be invested or for any loss or damages arising from the insolvency or tortuous act of any person,
firm or Company to or with whom any moneys, securities or effects shall be entrusted or deposited or any loss
occasioned by any error of judgement, omission, default or oversight on his part or for any other loss, damage or
misfortune whatever shall happen in relation to execution of the duties of his office or in relation thereto unless the
same shall happen through his own dishonesty.”
Secrecy Clause
420
Article 199 provides that “Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee,
Officer, servant, Agent, Accountant or other person employed in the business of the Company shall, if so required
by the Director, before entering upon his duties, sign a declaration pledging himself to observe a strict secrecy
respecting all transactions and affairs of the Company with the customers and the state of the accounts with
individuals and in matter thereto and shall, by such declaration pledge himself not to reveal any of the matters
which may come to his knowledge in the discharge of his duties, except when required to do so by the directors or
by law or by the person to whom such matters relate and except so far as may be necessary in order to comply with
any of provisions in these presents contained.”
No member to enter the premises of the Company without permission
Article 200 provides that “No member or other person (not being a Director) shall be entitled to visit or inspect
any property or premises of the Company without the permission of the Board of Directors or Managing Director
or to inquire discovery of or any information respecting any details of the Company‟s trading or any matter which
is or may be in the nature of the trade secret, mystery of trade, secret process or any other matter which relate to
the conduct of the business of the Company and which in the opinion of the Directors, it would be inexpedient in
the interest of the Company to disclose.”
421
SECTION IX: OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The copies of the following contracts which have been entered, or are to be entered into by our Company (not being
contracts entered into in the ordinary course of business carried on by our Company or contracts entered into more
than two years before the date of this Draft Letter of Offer) which are or may be deemed material have been attached
to the copy of the Letter of Offer delivered to the RoC for registration. Copies of the abovementioned contracts and
also the documents for inspection referred to hereunder, may be inspected at the Registered Office between 10 a.m.
and 5 p.m. on all Working Days until the Bid/Issue Closing Date.
A. Material Contracts for the Issue
1. Engagement Letter dated February 8, 2013 between our Company and the LM.
2. Issue Agreement dated March 8, 2013 between our Company and the LM.
3. Memorandum of Understanding dated March 8, 2013 between our Company and the Registrar to
the Issue.
B. Material Documents
1. Certified copies of the updated Memorandum and Articles of Association of our Company as
amended.
2. Certificate of Incorporation dated October 5, 2009.
3. Prospectus of our Company dated November 21, 2000.
4. Consents of our Directors, Company Secretary and Compliance Officer, Auditors, Lead Manager
to the Issue, Lenders, Legal Counsel, Sandeep S. Shah and Associates, Chartered Accountants and
the Registrar to the Issue to include their names in this Draft Letter of Offer to act in their
respective capacities, as applicable.
5. Resolution of our Board of Directors dated July 25, 2012 authorising the Issue and other related
matters.
6. The Report of the Auditors being, B S R & Co. and Chaturvedi & Shah, as set out herein dated
March 11, 2012 in relation to the audited financial information of our Company.
7. Annual Reports of our Company for the financial years 2008, 2009, 2010 and 2011 and 2012.
8. The Statement of Tax Benefits dated February 26, 2013 from Jitendra Sanghavi & Co., Chartered
Accountants.
9. Due Diligence Certificate dated [●] addressed to SEBI from the LM.
10. In principle listing approvals dated [●] and [●] issued by BSE and NSE respectively.
11. The Service Agreement dated July 1, 2011 entered between our Company with Ashish Agarwal.
Any of the contracts or documents mentioned in this Draft Letter of Offer may be amended or modified at any time
if so required in the of our Company or if required by the other parties, without reference to the Equity Shareholders,
subject to compliance with applicable law.
422
DECLARATION
No statement made in this Draft Letter of Offer contravenes any of the provisions of the Companies Act, 1956 and
the rules made thereunder. All the legal requirements connected with the Issue as also the guidelines, instructions
etc. issued by SEBI, Government and any other competent authority in this behalf, have been duly complied with.
We further certify that all the statements in this Draft Letter of Offer are true and correct.
Signed by the Directors of our Company
Gautam Doshi
__________________________________________
Amit Khanna
__________________________________________
Sujal Shah
__________________________________________
Anil Sekhri
__________________________________________
Prasoon Joshi
__________________________________________
Ashish Agarwal
Company Secretary & Manager
__________________________________________
Mohan Umrotkar
Group Financial Controller
__________________________________________
Date: March 11, 2013
Place: Mumbai
